The outlook isn't looking very bright for Coty , Deutsche Bank warned. Analyst Steve Powers downgraded shares to hold from buy following the beauty company's weaker-than-expected fiscal third-quarter earnings report. The company also lowered its full-year earnings guidance and guided for a mid-single digit decline in reported sales, citing foreign exchange headwinds. Powers trimmed his price target to $6 from $8, which still implies 31.3% upside potential from Wednesday's close. Slower growth trends — particularly in the U.S. market —and challenges presented by tariffs are dimming the outlook for Coty, according to Powers. He estimates the tariff headwind coming in at around $100 million or more for Coty, with the largest impact to its prestige fragrances segment. "While we believe that COTY is generally prioritizing the right initiatives in a difficult operating environment, we downgrade the stock to Hold following FY3Q25 results," said Powers. "Clearly, should macro conditions improve (i.e., category demand reaccelerate, tariff uncertainty fade) or the company be able to monetize its Wella stake (theoretically valued at ~$1B), COTY could be an outsized beneficiary. However, such catalysts are outside (or not fully within) the company's control, and we otherwise see an increasingly untenable path to long-term targets —at a time when the company has ~$1.1B of debt maturities coming due in CY26," the analyst continued. Shares were last trading down nearly 12% Thursday before the bell. Year to date, the stock has fallen more than 33%. COTY YTD mountain COTY year to date Analysts covering the stock are split. Coty has buy or strong buy ratings from 10 of 20 analysts, LSEG data shows. Another eight rate it as a hold, while two others assigned an underperform rating.
