uploads/2016/04/avp-pm.png

Piper Jaffray Downgraded Avon Products to ‘Neutral’

By

Updated

Price movement 

Avon Products (AVP) has a market cap of $2.2 billion. It rose by 3.3% and closed at $5.01 per share on April 12, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were 4.2%, 19.3%, and 23.7%, respectively, as of the same day. This means that Avon Products is trading 9.3% above its 20-day moving average, 25.2% above its 50-day moving average, and 21.4% above its 200-day moving average.

Article continues below advertisement

Related ETFs and peers

The Oppenheimer Mid-Cap Revenue (RWK) invests 0.75% of its holdings in Avon. RWK tracks a revenue-weighted index of the S&P Mid Cap 400 Index. RWK’s YTD price movement was 3.8% as of April 11, 2016.

The iShares Morningstar Small Value ETF (JKL) invests 0.39% of its holdings in Avon. JKL tracks a market-cap-weighted index of US small-cap value stocks. The index stocks from the 90th to 97th percentile of the market-cap spectrum using fundamental factors.

The market caps of Avon Products’ competitors are as follows:

  • Colgate-Palmolive (CL) – $63.9 billion
  • Estee Lauder (EL) – $34.7 billion

Piper Jaffray downgraded Avon Products

Piper Jaffray downgraded Avon Products’ rating to “neutral” from “overweight.” It set the price target at $5 per share.

TheStreet Ratings rated the company as “sell” with a score of “D.”

Article continues below advertisement

Performance in 4Q15 and 2015

Avon Products reported fiscal 4Q15 net sales of $1,607.3 million—a fall of 20.2% compared to net sales of $2,014.1 million in fiscal 4Q14. Sales of the beauty and fashion & home categories fell by 20.9% and 14.4%, respectively, in fiscal 4Q15—compared to fiscal 4Q14.

Its net income and EPS (earnings per share) fell to -$333.4 million and -$0.76, respectively, in fiscal 4Q15—compared to -$330.7 million and -$0.75, respectively, in fiscal 4Q14.

Fiscal 2015 results

In fiscal 2015, Avon Products reported total revenue of $6,160.5 million—a fall of 19.4% YoY (year-over-year). It reported operating profit of $165.0 million in fiscal 2015—compared to $434.3 million in fiscal 2014.

Its net income and EPS fell to -$1,148.9 million and -$2.60, respectively, in fiscal 2015—compared to -$388.6 million and -$0.88, respectively, in fiscal 2014.

Avon Products’ cash and cash equivalents and inventories fell by 26.6% and 11.8%, respectively, in fiscal 2015. Its current ratio fell to 1.1x in fiscal 2015—compared to 1.4x in fiscal 2014.

In the next part, we’ll look at Hasbro.

Advertisement

More From Market Realist