According to Piper Sandler, Coty beauty stock could surge in 2023. Analyst Korinne Wolfmeyer upgraded Coty’s stock from neutral to overweight, said in her 2023 health and beauty outlook. That said, the stock is poised to benefit from some macro developments. “Since launching on COTY about six months ago, we’ve seen a number of developments take place and seen the macro environment move in a direction that we think both position COTY well over 12 months. coming and making it easier for us to promote the name than it was in June,” Wolfmeyer wrote in a note Tuesday. Shares of Coty have fallen 18.5% last year. However, the analyst expects that increased exposure to China and travel retail will help the stock recover, while doubling the value of skin care products and high-end fragrances will boost the yield. profits for the company. Meanwhile, portfolio diversification will protect the company if consumers start to lower prices in a recessionary environment. “With ~5x discount to peers and ~3.5x discount to the 2021 average and the progress we’re seeing (see transcript on page 10), we that a narrower valuation gap relative to peers is certain,” reads the Note. The analyst’s $10 price target, up from $8, implies that the stock could rise more than 16% from Friday’s closing price. Coty shares rose more than 2% in premarket trading on Tuesday. —Michael Bloom of CNBC contributed to this report.