Beauty stock Coty could have a strong 2023, according to Piper Sandler. Analyst Corinne Wolfmeyer upgraded shares of Coty to overweight from neutral, saying in her 2023 Beauty & Wellness outlook that the stock is poised to benefit from several macro developments. “Since launching on CoTY roughly six months ago, we have seen a number of developments and see the macro environment moving in a direction that we think both positions Coty well for the next 12+ months and give us more flexibility in moving this name forward. Much more than we did back in June,” Wolfmayer wrote in Tuesday’s note. Shares of Coty declined 18.5% last year. However, analysts expect increased exposure to China and travel retail to help the stock recover, while doubling down on luxury skincare and fragrances will add to the company’s margins. Meanwhile, diversifying the portfolio should protect the firm should consumers start trading in a bearish environment. “With the ~5-turn discount to peers and the ~3.5-turn discount to 2021 averages, and the progress we’re seeing (see scorecard on page 10), we think a narrow valuation gap versus peers warrants is,” read. note. The analyst’s $10 price target, up from $8, means the stock could gain more than 16% from Friday’s closing price. Shares of Coty are up more than 2% in premarket trading Tuesday. —Michael Bloom of CNBC contributed to this report.