Coty Inc (NYSE:COTY) shares rallied on Tuesday after the New York-based beauty products company got an upgrade from investment bank and brokerage Morgan Stanley (NYSE:MS).
Analyst Dara Mohsenian upgraded Coty to Overweight from Equalweight and set a price target of US$14.50. Mohsenian said in a research note the risk-reward profile of the stock is now seen as compelling, TheFly reported.
The analyst said Coty can return to topline growth and that the market has turned too bearish by placing too much focus on weak US/European consumer beauty results and not enough on the strong performance of the luxury/professional segment, the report from TheFly added.
READ: Coty shares slide after fiscal 4Q revenue miss on P&G brand integration
Shares of Coty jumped as much as 10.1% to the session peak of US$13.37 and was trading 6.75% up at US$12.95 by midsession. The shares have fallen nearly 40% since the start of the year.
Analysts at BMO and Bank of America had downgraded the stock because of downside risks to its fiscal 2019 outlook.
Coty is a beauty products company that makes around 77 brands in cosmetics and fragrances, along with skin, nail and hair care products.