How will the company's targeted sequential LFL and EBITDA improvement in FY26 influence investor sentiment and the stock price?

Fundamental backdrop – Coty’s FY 25 results were “in line with expectations” but the company still faces a “complex” backdrop. Management’s explicit pledge to lift both same‑store (LFL) sales and EBITDA on a sequential basis in FY 26 – and to re‑enter growth in the second half of FY 26 – is a clear forward‑looking catalyst. For a consumer‑goods business that has struggled with margin compression and stagnant top‑line growth, a measurable improvement in LFL (a leading indicator of organic demand) and EBITDA (a cash‑flow proxy) signals a potential break‑to‑profitability. If the company can deliver even modest sequential gains (e.g., 2‑3 % LFL and a 5‑10 % EBITDA uplift), the market will likely re‑price the stock from its current “low‑sentiment” level (sentiment score 30) to a more neutral‑to‑positive stance, as analysts upgrade earnings forecasts and raise target prices.

Market dynamics & technical view – Coty’s shares have been trading in a tight range around the low‑50 cents level, with the 20‑day moving average (≈ 0.52) acting as a support line. The recent price action shows a shallow upward bias but limited volume, indicating that the market has not yet internalised the FY 26 upside narrative. A breakout above the 20‑day average, especially on higher-than‑average volume, would likely trigger short‑term momentum traders and could attract institutional buying as the forward‑look improves. Conversely, failure to break above this technical hurdle could keep the stock in a “value‑trap” mode, limiting upside.

Actionable insight – Keep the stock off‑to‑the‑side until a clear technical catalyst (e.g., a close above the 20‑day moving average with a 10‑day volume spike) aligns with a concrete update from Coty on FY 26 LFL/EBITDA targets (e.g., at the next investor‑day or earnings call). If management provides credible sequential guidance that points to a 2‑3 % LFL lift and a 5‑10 % EBITDA rise, consider initiating a moderate‑risk long position with a stop just below the recent support (≈ 0.48). The upside potential is a re‑rating of the stock from a “low‑sentiment” environment to a growth‑oriented narrative, which could translate into a 10‑15 % price appreciation over the next 6‑12 months, assuming the company meets its FY 26 improvement targets.