COTY is trading at $1.93 — down 15% on the week, 18% on the month, and 35% year-to-date — while securities class action deadlines pile up and short sellers rebuild positions at pace.
The class action story is the week's defining overhang. Multiple law firms have this week announced or reminded investors of shareholder lawsuits against Coty and certain former officers, with at least one plaintiff deadline falling on May 22. The allegations add a legal dimension to a stock already under sustained pressure, and they arrive just as the company launched the Marc Jacobs Beauty line — a high-profile comeback play that has done nothing to arrest the slide. The contrast between product-level optimism and shareholder-level distress is the sharpest tension in the name right now.
Short sellers have responded to the weakness with renewed conviction. Short interest climbed roughly 32% in the week ending May 9 — jumping from around 30 million to over 41 million shares — and has held near those levels since. As a percentage of the free float, that puts short interest at 4.7%. That is not an extreme reading, but the rate of accumulation is notable. The ORTEX short score is running at 58.2, up sharply from 48.9 two weeks ago. Despite the build in positioned shorts, the borrow market remains relaxed: availability is at 448%, meaning there are roughly 4.5 shares available to borrow for every share already borrowed. Cost to borrow is just 0.46%. There is no squeeze mechanism in the lending market at present — shorts are comfortable and not crowded out.
Options positioning has turned fractionally more defensive. The put/call ratio moved to 0.36 this week, above its 20-day average of 0.34. The z-score of 1.25 points to elevated put demand, but it remains well below the 52-week high of 0.69 — so while the direction of travel is cautious, options traders are not yet registering anything close to extreme bearishness. The setup reads as measured hedging rather than panic.
Analyst opinion is divided and the gap between outliers is striking. Post-earnings, Citigroup and TD Cowen both raised targets modestly — to $2.80 and $2.90 respectively — while maintaining neutral or hold ratings. RBC Capital has held its Outperform and a $8.00 target throughout, a figure so far above the $1.93 close and the mean target of $3.17 that it is worth flagging separately. With the stock now trading near multi-year lows, the mean target implies more than 60% upside on paper — a reading that reflects genuine disagreement on the Street rather than consensus optimism. Barclays and Deutsche Bank sit at the other end, with $2.00 targets and Underweight/Hold ratings. The RSI14 of 29.5 confirms the stock is technically oversold, though momentum factor scores rank in the bottom quartile. One genuine bright spot: the EPS surprise factor ranks in the 100th percentile, and forward EPS growth sits in the 89th — the fundamentals on a trailing basis have not been as bad as the share price implies.
Institutional ownership adds another layer of complexity. JAB Holdings controls 51.3% of shares, leaving limited float for the market to move. BlackRock recently added over 7 million shares and now holds 5.96%, and State Street, Charles Schwab, and others have made smaller additions in the April reporting cycle. The controlling shareholder concentration — a core element of the Benzinga bear case — caps the range of strategic outcomes available and keeps the stock structurally illiquid relative to its market cap.
The earnings history reinforces investor caution. The most recent print on May 5 produced a one-day gain of 9.5%, but the five-day follow-through was negative 5.8%. The prior two events both saw five-day declines of 14% to 18%. The pattern is consistent: any post-earnings relief has been faded quickly. With no confirmed next earnings date yet scheduled and the class action deadline passing this week, the near-term focus is on whether the legal noise intensifies, whether the Marc Jacobs Beauty launch generates measurable channel momentum, and whether the short score continues its two-week march higher.
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