Avon Products (NYSE:AVP) soared on Tuesday after a Citi analyst raised the rating and price target on the marketer of beauty products.
Shares jumped 27% to $3.62 at 1:03 p.m. in New York, paring this year’s slide to 63%.
Citi analyst Wendy Nicholson upgraded the rating on the company Buy from Neutral, while boosting the price target to $5.00 from from $3.50.
Nicholson said Avon’s core business is stabilizing and the company is expected to reinvest funds to boost growth.
Avon’s core business has shown some signs of stabilization in recent quarters in terms of flat organic revenue growth and stable underlying operating margins, Nicholson said.
A recent visit to the company’s Brazilian operations unveiled a business that “was not quite as unhealthy as we had expected to be,” Nicholson added.
Nicholson anticipates Avon to outline its plans to fund reinvestment in the business in order to reaccelerate growth and profits, during the company’s investor day on January 21