Perfume Group Coty Shares Performed the Worst Last Year

After receiving investment rating from JPMorgan Chase & Co. (NYSE:JPM) on JP Morgan Chase on Friday, beauty giant Coty Inc. (NYSE:COTY) Coty Group shares rose more than 10% on two days, sweeping 2018 in S&P The haze of the bottom of the 500 index.

Due to the integration of Procter & Gamble Co. (NYSE: PG) P&G Group's VW business is progressing slowly and encounters new supply chain problems. After the release of the first quarter results in early November 2018, Coty Group's share price has been swayed since the beginning of the year. The $20 fell to less than $6, with the last two months falling by nearly 50%.

In 2018, the Coty Group fell 67.0%, the worst performer in the S&P 500 Index (SPX), and even worse than the Victoria's Secret Victoria's Secret (VS) parent company L Brands Inc. (NYSE: LB), the latter's share price Romwe Coupon Code plunged 57.4% due to the continued downturn in VS and total loss of consumer contact. The S&P Consumer Goods Segment (XLP) fell 11.2% for the same period, while the S&P Retail Index (XRT) The annual decline was only 8.0%.

Xiaomo’s report on Friday said that due to the poor performance of the previous year, the share price of Coty Group has fallen, and the rating of Coty Group has been raised from “reduce” to “neutral”, analyst Andrea Teixeira believes In the next few quarters, the management will realign investor expectations and announce plans to re-launch Coty's growth.

Less than a week after the announcement of the first-quarter results triggered a sharp fall in stock prices, Coty Group announced that both Bart Becht and Camillo Pane had stepped down from the group chairman and CEO. Camillo Pane's coffee retailer Jacobs Douwe Egberts (JDE) and food retailer Mars, Incorporated former CEO Pierre Laubies, Dutch food giant JDE and Coty have the same major shareholder - the German rich Reinmen Lehman family Joh A. Benckiser Co. (JAB Holding Co.).

For the new CEO's policy, Andrea Teixeira believes that Coty may implement options to sell some or all of the weak consumer goods division.

As of the end of September, the first quarter of the 2019 fiscal year, Coty Group's mass consumer goods business revenue of 828.8 million US dollars, down 20.6% year-on-year, a comparable decline of 14.0%, and recorded an operating loss of 18.6 million US dollars. Coty said that the elimination of 5% of the supply chain impact still has a high single-digit decline, indicating weak US and European operations.

For investors may be bargain-hunting, Xiaomo analysts said it is too early, because the negative news of the US giants may follow, the trend of the mass consumer goods business may be worse than expected, and pressure on the full year of profitability.

Tang Xiaotang, an analyst at No Agency, a fashion industry research consultancy, said that after the first quarter results, JAB Cosmetics BV, the group's major shareholder, continued to increase its shareholding in Coty, while the group's dividend yield was attractive. Currently, the group is in perfumes and hair salons. And in the three fields of make-up, they occupy the first, second and third place in the world respectively. The stock price weakness in the past year was mainly due to the high proportion of mass consumer goods, and the poor Dacoz performance of this category was not the result of a company in Coty. It was a performance trend of the industry. Even if P&G was involved in how to integrate a large number of competing brands, In the frequent acquisition process, Coty is indispensable for the integration of time, energy and capital, and the market focuses on this. But he said that Coty's share price is already in a state of complete oversold, and in the coming year, the benefits far outweigh the risks.

The analyst who held Cotti's head gave the US beauty giant a "outperform" rating in the report at the end of last month, with a target price of $9.5.