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Value Analysis: Coty Inc (NYSE:COTY)
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We look at Coty Inc. (NYSE:COTY) [Trend Analysis] a company in the Consumer Goods industry being focused on by many investors, to assess if it provides value for investors considering buying or selling it. Currently Coty Inc. is trading at $31.08 after moving up 19.31% in the previous day of trading.
COTY is trading with a trailing 12 month P/E multiple of 58.64 and an estimated forward P/E multiple of 32.24. The stock has an estimated 5 year annual growth of 9.23% and a PEG multiple of 6.35.
Rather than the usual Price to Earnings (P/E) multiple method, we use a slightly different method to assess if Coty Inc. is potentially a value buy for investors, the PEG ratio (P/E to growth). This PEG multiple takes into account the expected long term growth in earnings of the company rather than merely the growth for one earnings period ahead as forward P/E does.
That is to say, P/E simply doesn’t account for the long term prospects of COTY. As a rule of thumb, a stock with a PEG of between 0 and 1 is usually considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of COTY being 6.35, we consider Coty Inc. to likely be overpriced.
This analysis means that value buyers who do not currently hold Coty Inc. (NYSE:COTY) should not consider buying and investors currently holding the stock should consider selling.
The mean analyst 12 month target price for Coty Inc. (NYSE:COTY) is currently $25.55 or 17.79% below the current price. Additionally, the stock has been as high as $31.29 and as low as $15.74 in the last 52 weeks. Analysts are estimating that COTY will report earnings per share of $0.30 next quarter.
