Avon’s stock tumbled 7.5 percent Monday after Canaccord Genuity said the company’s prospects as a takeover target were overblown. The stock closed at $3.83 a share, down 31 cents.
The cosmetics seller may not make sense as an acquisition for rivals in the makeup industry or private-equity buyers, Canaccord analyst Eddy Hargreaves said in a report. Avon lost more than half its value this year.
Avon has been the subject of takeover speculation since it rejected advances from Coty Inc. in 2012. Since then, the company has posted three years of declining sales, partly because consumers are shifting away from door-to-door cosmetics purchases — Avon’s hallmark.
“There has been no concrete offer for the business (or a stake in it) since 2012, despite the collapse in the share price,” Hargreaves said in the report. “This may be attributed to general skepticism about the long-term viability of the direct selling model, which has lost traction in developed markets.”