Coty Stock Soaring After Yet Another CEO Change

Still, COTY is down nearly 63% for the year

Assistant Editor
Jun 1, 2020 at 10:16 AM
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The shares of Coty Inc (NYSE:COTY) are up 18.2% to trade at $4.29 this morning, after the cosmetics company named its fourth CEO in less than four years. Current chairman Peter Harf is set to be named as the latest chief executive, according to the Wall Street Journal. The appointment runs counter to Coty's initial plan back in February to give the role to Pierre Denis --  Jimmy Choo boss and Coty board member -- takeover this summer.

Even with today's pop, Coty stock is still currently down 62% year-to-date. Earlier in May, we shed light on the fall COTY suffered from its all-time high. Since then, the equity came just within reach of its all-time low on May 20, hitting $3.16 at one point. The shares' subsequent rally is losing steam at their 30-day moving average -- a trendline that its closed above just once since Feb 24. 

As such, analysts are more reserved in their assessment of Coty stock. Of the nine in coverage, all brokerages rate it a "hold" or worse, with eight sporting that tepid "hold." However, the equity's 12-month consensus price target of $5.84 is a whopping 60.9% premium to last night's close, a surefire signal for some major price-target cuts to come.

In the option pits, the equity sports 10- and 50-day call/put ratio volumes of 41.38 and 16.74, respectively, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Both of these ratios rank in the highest percentile of their annual readings, meaning the appetite for calls is ravenous across the board.

Options traders should note that COTY's Schaeffer's Volatility Index (SVI) of 115% ranks in the 15th percentile of its annual range. This means that near-term options traders are pricing in relatively low volatility expectations, a boon for premium buyers.

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