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NEW YORK, United States — Avon Products Inc.'s stock jumped as much as 28 percent, its biggest gain in more than four decades, after Citigroup Inc. raised its rating on the beleaguered cosmetics company.
Citigroup upgraded the company to a buy recommendation, with a target price of $5, saying that Avon will “likely articulate some long-awaited plans to fund reinvestment in the business to reaccelerate more profitable growth.”
The report renewed investor optimism for a company reeling from three years of losses and the waning effectiveness of its door-to-door sales model. Avon also has struggled with currency fluctuations and a new industrial production tax in Brazil, resulting in an unexpected loss last quarter.
Avon rose as much as 80 cents to $3.65 on Tuesday, the most since at least January 1974. Before the rally, the shares had been down almost 70 percent.
By Nick Turner, Lauren Coleman-Lochner; editor: Mark Schoifet.
