Why Coty Inc. (COTY) Is Set to Be the Top Cosmetics Stock in 2025
We recently released a list of
12 Top Cosmetics Stocks to Consider in 2025
In this article, we will be examining the current situation of Coty Inc. (NYSE:COTY).
COTY
It stands out among top cosmetic industry stocks to invest in for 2025.
Summary of the Cosmetics Sector
As reported by Grand View Research, the worldwide cosmetics market was valued at approximately $295.95 billion in 2023. This industry is projected to expand with a compound annual growth rate of 6.1% from 2024 through 2030. A key catalyst for this expansion is the growing consumer focus on enhancing personal aesthetics. Items like makeup, haircare items, skincare solutions, and colored cosmetics have turned into daily necessities, boosting their popularity further. Additionally, the rise of eco-friendly options—such as toxin-free, natural, and organic beauty products—is also fueling the sector’s development.
The online cosmetics sector is showing parallel developments. As stated in a Mordor Intelligence report, the online cosmetics market was valued at $16.23 billion in 2025. This industry is anticipated to expand with an estimated compound annual growth rate of 8.47% from 2025 through 2030, potentially attaining a worth of $24.37 billion by the conclusion of this forecasting timeframe.
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How Might Trump’s Tariffs Affect America’s Korean Beauty Cosmetics Sector?
While South Korea leads in cosmetic imports, President Trump might approve a potential 25% tariff on the nation if he gives the go-ahead following a 90-day suspension period for most of his proposed retaliatory tariffs. As per data released by CBS News on April 16, U.S. customs recorded over $7.5 billion worth of cosmetics being brought into the country last year based on figures provided by the US International Trade Commission. Of this total, approximately $1.7 billion originated from South Korea. The surge in popularity of K-beauty items such as skin creams, shampoos, and lipsticks has significantly boosted sales among American stores. A major factor driving this growth can be attributed to influential people on social platforms who frequently endorse these beauty goods.
Nevertheless, the introduction of Trump’s tariffs might lead to substantial increases in prices for these items, prompting consumers to “stock up” on their preferred Korean goods, as reported by CBS News. This situation has become concerning for the Personal Care Products Council, an organization that represents over 600 companies including Estée Lauder, Procter & Gamble, L’Oréal, and Neutrogena.
The organization expressed in a statement their particular “alarm regarding trade policies that might lead to increased costs for individual grooming items,” noting further that U.S. consumers typically utilize “between six and twelve such goods daily, which can include sunscreens, toothpastes, shampoos, lotions, and perfumes.”
Our Methodology
To create our compilation of 40 cosmetic company stocks, we examined various sources such as stock screeners, financial news outlets, and exchange-traded funds. From this list, we selected the top 12 favorites amongst hedge funds for the fourth quarter of 2024. These selections are ranked based on increasing levels of hedge fund interest. Our information regarding hedge fund preferences was obtained from Insider Monkey’s records.
Why do we focus on the stocks that hedge funds accumulate? It’s straightforward: our analysis indicates that mimicking the leading stock choices from premier hedge funds allows us to surpass the market performance. Each quarter, our monthly bulletin chooses 14 small-cap and large-cap equities, delivering a return of 373.4% since May 2014, which significantly outperforms its benchmark by 218 percentage points.
see more details here
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A detailed view of a woman’s face adorned with a beauty item, showcasing the brand’s line of premium products.
Coty Inc. (NYSE:
COTY
)
Number of Hedge Fund holders: 28
Coty, Inc. (NYSE: COTY), a major player in the beauty industry, manages a wide range of brands covering color cosmetics, fragrances, and skincare and personal care items. Their Prestige division handles numerous high-end labels such as Gucci, Marc Jacobs, Miu Miu, Tiffany & Co., Kylie Cosmetics from Kylie Jenner, Hugo Boss, Burberry, Chloe, Calvin Klein, SKKN BY KIM, among others. This global enterprise distributes its merchandise in over 121 nations worldwide. Coty, Inc.’s (NYSE: COTY) everyday cosmetic offerings reach consumers mainly via supermarkets, large retail chains, pharmacies, departmental outlets, online vendors, and additional distribution platforms.
On April 1st, RBC Capital Markets’ analyst Nik Modi kept a “Buy” recommendation for Coty, Inc. (NYSE: COTY), establishing a price objective at $13.00. Meanwhile, Berenberg’s analyst Fulvio Cazzol began covering the company on March 25th, recommending a “Buy” stance as well, with a targeted share value of $7.50. In his report shared with clients, the analyst indicated expectations that the global beauty sector would see an uptick back into the 3%-to-3.5% growth bracket within advanced economies. He further noted predictions suggesting stabilization occurring in China during the first half of 2025 followed by renewed expansion later in the same year. Additionally, emerging market forecasts anticipate approximately 8% growth throughout 2025.
Therefore, the analyst thinks that Coty, Inc. (NYSE:COTY) is nearing the bottom of its valuation multiples, suggesting that the stock’s prospects will soon get more intriguing.
Overall, COTY
ranks 11th
On our roster of top cosmetic industry stocks to consider purchasing in 2025, we recognize the possible upside with COTY; however, we lean towards thinking certain artificial intelligence stocks may offer superior prospects for generating significant gains over a briefer period. One such AI stock has seen growth year-to-date despite many well-known AI equities shedding roughly 25% from their values. Should you seek an AI-based option offering better potential compared to COTY yet trading below five times its earning rate, explore further details in our comprehensive analysis available here.
cheapest AI stock
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Disclosure: There are no conflicts of interest. This article was initially published here.
Insider Monkey
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