NEW YORK (TheStreet) -- Avon Products(AVP) - Get Report stock is rising 4.12% to $4.17 in mid-morning trading on Friday after Jefferies analysts initiated coverage of the beauty products company with a "buy" rating and a $7 price target.
"AVP is early in a three-year transformation, but selling North America to Cerberus alleviates cash worries, with remaining international business poised for greater growth," Jefferies analysts wrote in a note released before today's market open.
While New York City-based Avon Products still has risks, including volatility in the stock, direct selling is set for strong growth, particularly in the cosmetics and personal care segments.
"We note that the household goods & durables, and clothing & accessories DS categories are fairly sizeable, with estimated annual retail sales of ~$17bn (13% of DS market) and ~$9bn (7%), respectively," analysts added. "We estimate that Avon has single-digit market shares within each of these categories."
Separately, Avon Products has a "sell" rating and a letter grade of D at TheStreet Ratings because of the company's deteriorating net income, weak operating cash flow, generally disappointing stock performance and feeble earnings per share growth.
You can view the full analysis from the report here: AVP
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.