Coty Inc. (COTY) Intrinsic Value & DCF Valuation
Household & Personal Products · NYSE
Current Price
$2.07
Intrinsic Value
$2.88
+28.1% margin of safety
What Is Coty Inc.'s Intrinsic Value?
As of 2026-06-12, our base-case DCF model estimates the intrinsic value of Coty Inc. (COTY) at $2.88 per share, compared with a market price of $2.07, a margin of safety of +28.1%. The base case assumes 2.3% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $2 to $3.92. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How our DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Coty Inc. (COTY) Undervalued?
At $2.07, COTY trades about 28.1% below our base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety we require before calling a stock undervalued.
COMPETITIVE MOAT
↑Brand Portfolio Strength
Coty possesses a diverse portfolio of well-established brands across beauty and fragrance. This brand recognition fosters customer loyalty and allows for premium pricing power in certain segments.
↑Distribution Network
The company benefits from extensive global distribution channels, reaching a wide consumer base. This established network is difficult and costly for new entrants to replicate.
↑Scale and Efficiency
Coty's significant scale in manufacturing and supply chain operations can lead to cost efficiencies. This allows for competitive pricing and better margins compared to smaller players.
INVESTMENT RISKS
↓Litigation and Legal Scrutiny
Recent class action lawsuits alleging securities fraud create significant legal and reputational risks. These can lead to substantial financial penalties and damage investor confidence.
↓Market Volatility and Competition
The beauty and personal care market is highly competitive and subject to changing consumer trends. Intense competition can pressure pricing and market share.
↓Earnings Performance Concerns
A significant stock price decline following recent earnings reports indicates potential operational or strategic challenges. This suggests a need for improved financial performance to regain investor trust.
Base case
COTY base case valuation
Intrinsic Value
$2.88
Margin of safety
+28.1%
Expected annual return
+6.8%
Base case assumptions: 2.3% annual growth, 10.0% discount rate, 6x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the COTY valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Coty Inc. respond.
Open DCF Calculator for COTYCompany Overview
Coty Inc., operating globally with its various subsidiaries, is a prominent beauty enterprise engaged in the creation, promotion, distribution, and retail of diverse beauty products. The company offers an extensive portfolio of high-end items, including luxury fragrances, advanced skincare formulations, and sophisticated color cosmetics. These prestigious offerings are made available to consumers through a variety of upscale retail channels such as specialty perfumeries, renowned department stores, online boutiques, proprietary direct-to-consumer websites, and duty-free shops. Its premium brand collection features names like Alexander McQueen, Burberry, Bottega Veneta, Calvin Klein, Cavalli, Chloe, Davidoff, Escada, Gucci, Hugo Boss, Jil Sander, Joop!, Kylie Jenner, Lacoste, Lancaster, Marc Jacobs, Miu Miu, Nikos, philosophy, Kim Kardashian West, and Tiffany & Co. Furthermore, Coty caters to the mass market segment, providing accessible color cosmetics, popular fragrances, essential skincare, and body care products. These items are primarily distributed through major retail outlets such as hypermarkets, supermarkets, drugstores, pharmacies, mid-tier department stores, traditional grocery and pharmacy chains, and various e-commerce platforms. Key brands within this category include Adidas, Beckham, Biocolor, Bozzano, Bourjois, Bruno Banani, CoverGirl, Jovan, Max Factor, Mexx, Monange, Nautica, Paixao, Rimmel, Risque, Sally Hansen, Stetson, and 007 James Bond. To broaden its international presence, Coty Inc. also utilizes third-party distributors, extending its reach to approximately 150 countries and territories worldwide. The company, established in 1904 and headquartered in New York, New York, functions as a subsidiary of Cottage Holdco B.V.
Financial Metrics — COTY Stock Valuation Data
Revenue/Share (TTM)
$6.58
FCF/Share (TTM)
$0.35
ROIC (TTM)
3.8%
ROE (TTM)
-15.1%
P/FCF
5.9x
EV/EBITDA
50.8x
FCF Yield
17.04%
Debt/Equity
1.15x
Based on trailing twelve-month data, COTY shows a free cash flow per share of $0.35 and a ROIC of 3.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 5.9x and FCF yield of 17.04% are important context metrics when evaluating COTY's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of COTY?
Coty Inc. currently generates $0.35 in free cash flow per share. At the current price of $2.07, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is COTY undervalued?
COTY trades at a P/FCF ratio of 5.9x with a free cash flow yield of 17.04%. This relatively low P/FCF may suggest the stock is attractively priced relative to its cash generation. However, whether COTY is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value COTY stock using DCF?
To perform a DCF valuation on Coty Inc.: (1) Start with the trailing free cash flow per share ($0.35) as the base, (2) project future FCF growth over 5-10 years based on Household & Personal Products industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting COTY's risk profile — with a debt-to-equity of 1.15x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to COTY?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Coty Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Household & Personal Products trends, then discounting those amounts to today's dollars. COTY's ROIC of 3.8% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect COTY stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For COTY, with a debt-to-equity ratio of 1.15x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 50.8x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See COTY PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Defensive valuationsDCF and P/E value COTY with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.