What Happened?

Shares of beauty products company Coty (NYSE:COTY) fell 9.3% in the afternoon session after Bank of America analysts issued a rare double downgrade on the company, shifting their rating from Buy to Sell, signaling a significant deterioration in their outlook. Alongside the downgrade, the firm slashed its price target from $9 to $4.50. The analysts pointed to declining market share, an indication the company was losing ground to competitors, and persistent softness in consumer spending, which could pressure both top-line growth and profitability.

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What The Market Is Telling Us

Coty’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Coty is down 31.2% since the beginning of the year, and at $4.72 per share, it is trading 59.7% below its 52-week high of $11.70 from April 2024. Investors who bought $1,000 worth of Coty’s shares 5 years ago would now be looking at an investment worth $816.33.

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