Why We’re Revising Our Price Estimate For Avon From $3 To $5
Avon has been on a downhill journey since 2011 (its last profitable year) as its direct selling model continued losing market share to retail outlets and online shopping. Avon’s annual sales had declined by ~35% since 2011, and its share price, too, fell by ~80% during the same period. In 2015, Avon had been on the lookout for a buyer for all or parts of its business, which it finally found in December in Cerberus Capital Management. Cerberus invested $435 million into Avon and carved Avon’s North American division into a separate entity by investing another $170 million in it. In January this year, Avon entered into a strategic collaboration with Hewlett-Packard for hybrid infrastructure information. The agreement is expected to enhance Avon’s global IT infrastructure, where Hewlett-Packard will help Avon by identifying cost-effective tools and processes in order to boost the beauty company’s operational efficiencies. This will improve Avon’s adaptability to the ever-changing dynamics in the beauty industry. We expect these changes to significantly revive the company’s performance in the coming years.
Have more questions about Avon Products (NYSE:AVP)? See the links below:
- What Is Avon’s Fundamental Value Based On 2016 Estimated Numbers?
- What Led To Avon’s Revenue And EBITDA Decline Over The Last Five Years?
- Revlon Versus Avon: How Do The Top Line And Bottom Lines Fare Currently?
- How Coty Benefits From Recent Divestment & Deleveraging Plans
- Synergies From The Avon-Natura Merger Could Unlock More Than $1 Billion In Value For Shareholders
- What Does The Avon-Natura Merger Deal Mean For Investors In Avon?
- A Closer Look At Avon’s Global Operations, And What’s In It For Natura
- Key Takeaways from Avon’s Q4 Earnings
- Will Representatives Growth Drive Avon’s Q4 Earnings?
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