Hardman Johnston Global Advisors, an investment management company, released its “Hardman Johnston Global Equity Strategy” investor letter for the fourth quarter of 2025. A copy of the letter can be downloaded here. Global equity markets delivered robust results in the quarter, backed by easing inflation trends and strong economic data. The Hardman Johnston Global Equity Strategy returned 2.91%, net of fees, compared to the MSCI AC World Net Index’s 3.29% gain. The Financials and Consumer Staples sectors c ...

J P M O R G A N Asia Pacific Equity Research 18 January 2026 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. China Consumer Strategy Stock Ideas for the Year of the Horse The top-5 investment themes for the China consumer sector in 2026 are: (1) end- demand ...

Upgrades Summary - Susquehanna upgraded Arm (ARM) to Positive from Neutral with an unchanged price target of $150, citing recent downgrades from competitors and significant underperformance as an "excellent setup" for investors [2] - BNP Paribas upgraded Seagate (STX) to Outperform from Neutral with a price target of $380, expressing greater conviction that "robust" data center storage demand could lead to a longer upcycle than initially expected [2] - Raymond James upgraded Ulta Beauty (ULTA) to Strong Buy from Outperform with a price target increase to $790 from $605, anticipating "outsized growth" in fiscal 2026 following heavy investments [2] - Northcoast upgraded Advance Auto Parts (AAP) to Buy from Neutral with a price target of $55, highlighting "healthy" demand trends and performance improvements into 2026, along with a strategic decision to sell Worldpac and focus on core retail [2] - BofA upgraded Oklo (OKLO) to Buy from Neutral with a price target raised to $127 from $111, following a binding agreement with Meta (META) to develop a phased 1.2 GW advanced nuclear campus [2]

Core Insights - Coty Inc. is focusing on its innovation pipeline to drive organic revenue growth amid macroeconomic pressures affecting discretionary beauty spending [1][7] - The company is emphasizing fragrances and selective expansion into high-margin categories to improve sales trends [1] Innovation Strategy - A key component of Coty's strategy is the global launch of BOSS Bottled Beyond, which is performing well in Europe and Australia and aims to enhance brand penetration in the U.S. [2] - Coty is also increasing its presence in the fragrance mists category, which is growing rapidly and contributing positively to margins, with successful launches from Calvin Klein, Kylie Cosmetics, and adidas [2] Premium Segment Growth - The ultra-premium fragrance segment saw a 17% growth in the first quarter, indicating strong demand for higher-end products [3] - Upcoming launches include ultra-premium fragrances under the Etro brand and Marc Jacobs Beauty makeup, along with new licenses like Swarovski and Marni [3] Sales Momentum - Management anticipates that the concentration of product launches in the second half of fiscal 2026 will be crucial for restoring positive sales momentum [4] - Current revenue pressures are attributed to trade inventory adjustments, but the innovation pipeline is expected to support a return to positive like-for-like sales growth [4] Stock Performance - Coty's shares have decreased by 2.8% over the past month, underperforming the Consumer Staples sector, which grew by 2.4%, and the S&P 500 index, which rose by 1.3% [5] - The stock is trading at a forward P/E ratio of 6.69, significantly lower than the industry average of 30.32 and the sector average of 16.81, indicating a modest discount compared to peers [9]

Core Viewpoint - Unilever PLC (NYSE:UL) is facing challenges in its stock performance and market confidence, with recent downgrades from analysts indicating concerns over valuation and earnings growth potential [2][3]. Group 1: Analyst Ratings and Price Targets - BNP Paribas downgraded Unilever PLC from Outperform to Neutral with a price target of $71, citing that valuations in the consumer staples sector are expected to remain "cheap" [2]. - Jefferies maintained an Underperform rating but raised its price target for Unilever from 4,000 GBp to 4,100 GBp, highlighting challenges in price and operating margins that limit earnings growth [2]. Group 2: Financial Performance and Market Concerns - Unilever's stock is down by 1.65% year-to-date as of January 9, 2026, indicating a negative market sentiment [3]. - Jefferies noted that volume and mix are expected to be approximately 2% in the fourth-quarter results, with concerns about declining U.S. growth contributions affecting market confidence in the first half of 2026 [2].

Group 1 - Coty Inc. is considered one of the cheap stocks to buy for the next three years despite recent downgrades from multiple firms [1][2][3] - Grupo Santander downgraded Coty to Neutral from Outperform with a price target of $3.50, citing an extended transition phase due to leadership changes [1] - Evercore ISI also downgraded Coty to In Line from Outperform with a price target of $7, highlighting the departure of CEO Sue Nabi as a significant factor affecting the investment thesis [2] Group 2 - Bank of America lowered its price target for Coty to $3 from $3.50 while maintaining an Underperform rating, indicating concerns over consumption growth in the consumer staples sector [3] - Coty operates through two segments: Prestige and Consumer Beauty, manufacturing and distributing branded beauty products worldwide [4]

Core Insights - The report highlights an increase in consumer complaints in Qinghai Province, with a total of 41,724 complaints received in 2025, marking a 26% increase from 2024 [1] - The resolution rate for these complaints stands at 74.1%, with 30,918 cases resolved, resulting in a total economic loss recovery of 11.768 million yuan [1] Group 1: Complaint Statistics - In 2025, the breakdown of complaints includes 22,219 related to goods, 13,583 related to services, and 5,922 categorized as others [2] - The increase in resolved complaints reflects a 13.1% rise in resolution rate and a 14.9% increase in the amount of economic loss recovered compared to the previous year [1] Group 2: Characteristics of Complaints - Over 50% of complaints pertain to goods, with significant issues reported in food quality and safety, as well as after-sales service for home appliances [2] - Service-related complaints are rapidly increasing, particularly in pre-paid consumption and lifestyle services, with notable issues in fitness, education, beauty, and travel sectors [2] Group 3: Recommendations and Actions - The provincial consumer association suggests collaborating with administrative departments for targeted rectification and enhancing the functionality of the national consumer complaint platform [3] - There is an emphasis on improving consumer risk identification and legal rights awareness, aiming to create a cooperative environment for consumer protection [3]

Core Insights - Helen of Troy Limited (HELE) reported mixed third-quarter fiscal 2026 results, with net sales exceeding estimates while earnings matched expectations, both showing year-over-year declines [1][3][10] Financial Performance - Adjusted earnings per share were $1.71, a 36% decline from $2.67 in the prior year due to lower adjusted operating income and increased interest expenses, partially offset by reduced income tax expenses [3][10] - Net sales reached $512.8 million, surpassing the Zacks Consensus Estimate of $505 million, but decreased by 3.4% from $530.7 million in the previous year, driven by a 10.8% drop in organic business sales [4][10] - International sales fell 8.1% to $119.6 million, influenced by changing market dynamics in China [5] Segment Performance - Home & Outdoor segment net sales declined 6.7% to $229.6 million due to competitive pressures and lower retailer replenishment, although offset by strong demand for travel and lifestyle packs [8] - Beauty & Wellness segment net sales decreased 0.5% to $283.2 million, primarily due to a 13.9% drop in organic business sales, which was partially mitigated by contributions from the Olive & June acquisition [9] Margin and Cost Analysis - Consolidated gross profit margin contracted by 200 basis points to 46.9%, impacted by higher tariffs and inventory obsolescence, though partially offset by lower commodity costs [6] - The SG&A ratio increased by 160 basis points to 35.6%, driven by higher compensation expenses and increased freight costs [7] Outlook - The company revised its fiscal 2026 consolidated net sales revenue outlook to between $1.76 billion and $1.77 billion, reflecting expectations of continued consumer spending softness and macroeconomic uncertainty [12][13] - Projected GAAP loss per share is now expected to be between $35.57 and $36.07, with adjusted EPS ranging from $3.25 to $3.75, down from previous estimates [14] - Management anticipates ongoing pressures from a promotional retail environment and consumer trade-down behavior, alongside margin pressures from tariffs and unfavorable product mix [15]

Core Viewpoint - Coty Inc. is experiencing a transition phase following the departure of its CEO, leading to multiple downgrades from analysts and concerns about the company's future performance [1][2][3]. Group 1: Analyst Downgrades - Banco Santander downgraded Coty Inc. from Outperform to Neutral with a price target of $3.50, citing a prolonged transition phase due to the CEO change [1]. - Evercore ISI also downgraded Coty Inc. from Outperform to In Line, setting a price target of $7, and described the current moment as a "pivotal juncture" for the company [2]. - TD Cowen lowered its price target from $4.00 to $3.75 while maintaining a Hold rating, highlighting risks such as inventory reductions and a challenging environment in mass cosmetics [4]. Group 2: Company Performance and Challenges - The Consumer division of Coty Inc. accounts for approximately 15% of its profits but is associated with significant operational challenges and negative sentiment [3]. - Evercore ISI noted limited visibility on timing and catalysts for a potential value unlock, suggesting that the stock is currently undervalued but may remain so in the near term [3]. - The company is undergoing a strategic review of its Consumer division, which is critical for its future direction [2].

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