Avon Products (AVP - Get Report)  reported third-quarter results that were below analysts' expectations last week, but Jefferies sees positive trends emerging in Brazil and Mexico.

"Despite the 3Q miss, results show continued progress against long-term objectives. We view recent share weakness as a buying opportunity," the firm wrote in an analyst note on Monday.

Third-quarter revenue fell short of Wall Street's estimates due to a slowdown in Europe, the Middle East and Africa and declines in the Asia Pacific region. But revenue from Mexico, which is a key market, accelerated for the second straight quarter, Jefferies noted.

On a constant dollar basis, Mexico revenue was up 9% during the period, while Brazil revenue increased 6% in constant currency.

Brazil is Avon's largest market and makes up about 20% of revenue. "The country saw positive growth in both active/ending representatives, and is gaining market share in all three beauty categories," the firm said.

The company's three beauty categories are skincare, fragrance and color.

A key tenet of the firm's thesis on Avon is that the company can execute on its three long-term goals: low-single digit active representative growth, mid-single digit constant currency revenue and low-double digit adjusted operating margin. Jefferies believes the company is still executing on these objectives. 

Additionally, the firm said a slight gross margin decline due to currency headwinds was more than offset by improvement in selling, general and administrative expenses (SG&A). Gross margin was 60.9%, down 20 basis points in the quarter.

"An expected positive inflection in GM did not come to fruition in 3Q (-20bps vs. our/consensus +25bps) as FX continued to be a headwind, which more than offset strategic pricing and lower supply chain costs," the firm added.

Jefferies noted that the macro environment, FX rates and regulatory scrutiny are key risks to its valuation. The firm maintained a "buy" rating and $8 price target on the stock.

Shares of Avon Products were rebounding nearly 4% in early-afternoon trading today.