U.S. markets closed

Here's How Coty (COTY) is Positioned Ahead of Q2 Earnings

Zacks Equity Research

Coty Inc. COTY is slated to come up with second-quarter fiscal 2020 results on Feb 5. The cosmetics giant has trailing four-quarter positive earnings surprise of 8.5%, on average. Let’s see how the company is positioned ahead of the upcoming quarterly results.

Estimates Picture

The Zacks Consensus Estimate for fiscal second-quarter earnings is currently pegged at 24 cents per share, flat compared with the year-ago quarter’s figure. Notably, the consensus mark has moved down by a penny in the past 30 days.  Also, the consensus mark for revenues is pegged at $2,342 million, which suggests a decline of 6.7% the year-ago quarter’s level.

Coty Inc. Price and EPS Surprise

 

Coty Inc. Price and EPS Surprise

Coty Inc. price-eps-surprise | Coty Inc. Quote


Factors at Play

Coty has been struggling with hurdles in the Consumer Beauty segment. Persistent softness in mass beauty categories along with reductions in shelf space in North America has been a headwind. Additionally, the divestiture of Younique (concluded on September 16) is a concern.

Nevertheless, the Luxury segment has been benefiting from solid consumer demand and prudent innovations. Additionally, strong brand performance has been driving the unit. Further, the company has been gaining from broader e-commerce operations. In this regard, the company’s partnerships with online retailers bode well. Also, Coty has been undertaking other transformation initiatives like streamlining operations and upgrading systems. Moreover, the company’s focus on cost-reduction efforts bodes well.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Coty this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Coty carries a Zacks Rank #3 and has an Earnings ESP of -3.01%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Post Holdings, Inc. POST presently has an Earnings ESP of +5.47% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Hain Celestial Group, Inc. HAIN currently has an Earnings ESP of +5.26% and a Zacks Rank #2.

Campbell Soup Company CPB presently has an Earnings ESP of +3.34% and a Zacks Rank #2.

Free: Zacks’ Single Best Stock Set to Double

Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.

See 5 Stocks Set to Double>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Coty Inc. (COTY) : Free Stock Analysis Report
 
Post Holdings, Inc. (POST) : Free Stock Analysis Report
 
The Hain Celestial Group, Inc. (HAIN) : Free Stock Analysis Report
 
Campbell Soup Company (CPB) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.