Avon Products, Inc. (NYSE:AVP) Nears Deal to Sell North American Business


Earlier this week rumors that Oprah might buy into Avon Products, Inc. (NYSE:AVP) fueled a share price rise, before the rumor was shot down. Now another rumor, this time much more likely, is fuelling yet another rise in Avon Products, Inc. (NYSE:AVP) stock. According to reports by the Wall Street Journal, the company is in talks with the private equity firm, Cerberus Capital Management LP about selling off their underperforming North American business. Under the proposed deal Cerberus would take on a minority stake in Avon Products, Inc. (NYSE:AVP), while Avon gets to boost their balance sheet , something they despartely need to do. Shares are up over 11% in pre-market trading this morningThe stock closed at $3.99 during the last trading session. It is down 51.10% since May 1, 2015 and is downtrending. It has underperformed the S&P500 by 50.90%.

From a total of 5 analysts covering Avon Products Inc. (NYSE:AVP) stock, 2 rate it a “Buy”, 1 a “Sell”, and 2 a “Hold”. This means that 40% of the ratings are positive. The highest target price is $10 while the lowest target price is $3.20. The mean of all analyst targets is $5.93 which is 48.62% above today’s ($3.99) stock price. Avon Products Inc. was the topic of 8 analyst reports since August 3, 2015 according to the firm StockzIntelligence Inc. Citigroup upgraded shares on November 24 to a “Buy” rating. B. Riley & Co maintained AVP stock in a recent report from November 5 with a “Neutral” rating.

The institutional sentiment decreased to 0.72 in Q2 2015. It’s down 0.18, from 0.9 in 2015Q1. The ratio turned negative, as 88 funds sold all their Avon Products, Inc. shares they owned while 114 reduced their positions. 39 funds bought stakes while 106 increased their total positions. Institutions now own 435.94 million shares which is 5.94% more than the previous share count of 411.50 million in 2015Q1.

Royal Capital Management Llc holds 5.21% of its total portfolio in Avon Products, Inc., equating to 385,000 shares. Mcclain Value Management Llc owns 1.73 million shares representing 2.71% of their total US portfolio. Moreover, Parametrica Management Ltd has 2.53% of their total portfolio invested in the company, equating to 10,133 shares. The Pennsylvania-based Mcglinn Capital Management Inc has a total of 1.87% of their portfolio invested in the stock. Weitz Investment Management Inc., a Nebraska-based fund reported 8.86 million shares owned.

Avon Products, Inc. is a manufacturer and marketer of beauty and related products. The company has a market cap of $1.74 billion. The Company’s offers its products under two product categories: Beauty and Fashion & Home. It currently has negative earnings. Beauty consists of skincare , fragrance and color (cosmetics).