EssilorLuxottica SA (EL) AI Stock Analysis

• Market Cap: €108.23B
• Dividend Yield: 1.46%
• Average Volume (3M): 649.69K
• Price to Earnings (P/E): 45.1
• Beta (1Y): 0.87
• Revenue Growth: 4.38%
• EPS Growth: 1.71%
• Country: FR
• Employees: 153,498
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Medical - Instruments & Supplies
• EPS (TTM): 2.98
• Shares Outstanding: 463,145,540
• 10 Day Avg. Volume: 668,094
• 30 Day Avg. Volume: 649,690
• PEG Ratio: 0.73
• Price to Book (P/B): 2.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 23.29
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €269.73
• Price Target Upside: 15.12% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 67 Neutral
• Price Target: €268.00 ▲(14.38%Upside)

EssilorLuxottica SA presents strong financial performance with consistent growth and profitability, providing a solid foundation. However, technical indicators suggest a bearish trend, and the stock's high P/E ratio raises valuation concerns. The lack of guidance or sentiment insights from the earnings call adds uncertainty to the outlook.

Positive Factors

Financial performance

EssilorLuxottica posted a solid performance overall, especially in DTC (+10.1%) across all geographies.

Market position

Essilorluxottica is recognized as a structural share taker and prime consolidator in a steadily-growing optical market, showcasing strong innovation from MedTech to Digital and Hearing Care.

Negative Factors

Foreign exchange risk

10% change in the USD/EUR parity has 6% impact on EPS, highlighting FX risks.

Tariffs

Main uncertainty remains tariffs, principally impacting made-in-China frames imported to the US.

EssilorLuxottica SA Business Overview & Revenue Model

Company Description

EssilorLuxottica Société anonyme designs, manufactures, and distributes ophthalmic lenses, frames, and sunglasses in North America, Europe, Latin America, Asia, Oceania, and Africa. It operates in five segments: Wholesale, Retail, Lenses and Optical Instruments, Equipment, and Sunglasses and Readers. The Wholesale segment engages in the manufacture and wholesale distribution of luxury and sports eyewear. The Retail segment retails luxury and sports eyewear. The Lenses and Optical Instruments segment offers lenses and small equipment, including Varilux progressive lenses; Crizal antireflective, anti-smudge, and antistatic lenses; Transitions photochromic lenses; Eyezen lenses for users of computers, tablets, smartphones, and other connected devices; Xperio polarized sun lenses; and Nikon and Kodak corrective lens brands. It also provides lens edging and mounting instruments for opticians and prescription laboratories; optometry instruments for eye care professionals, schools, occupational medicine centers, military, and other institutions; and Transitions Signature Gen 8 photochromic lens, as well as develops solutions for online sales of optical products. The Equipment segment offers digital surfacing machines and lens coating machines to prescription laboratories, integrated optical chains, and lens manufacturers. The Sunglasses and Readers segment provides non-prescription sunglasses and reading glasses under the Foster Grant, Gargoyles, Magnivision, Corinne McCormack, Monkey Monkey, Ryders Eyewear, and SolarShield brands; Reebok, Steve Madden, Betsey Johnson, Nine West, Dockers, French Connection, Ironman, Rawlings, Bodyglove, Panama Jack, Marvel, and Disney; Bolon, Molsion, Qina, and Prosun brands; and Mujosh and Aojo brands. It has a network of 490 prescription laboratories and edging-mounting facilities. The company was formerly known as Essilor International Société Anonyme and changed its name to EssilorLuxottica Société anonyme in October 2018. EssilorLuxottica Société anonyme was founded in 1849 and is headquartered in Paris, France.

How the Company Makes Money

EssilorLuxottica generates revenue through a diversified business model that includes the sale of optical lenses, frames, and sunglasses across various distribution channels. The company's revenue streams are primarily derived from its wholesale and retail operations. Wholesale revenue comes from selling products to third-party retailers and eye care professionals, while retail revenue is generated from direct sales to consumers through an extensive network of retail stores and e-commerce platforms. Additionally, the company benefits from a robust licensing business, where it designs and manufactures eyewear for luxury and premium brands. Strategic partnerships with optical professionals and retailers further enhance its market reach and sales capabilities. The company also invests in research and development to drive innovation in lens technology and eyewear design, which helps maintain its competitive edge and attract a loyal customer base.

EssilorLuxottica SA Financial Statement Overview

Summary

EssilorLuxottica SA presents a comprehensive financial profile marked by consistent revenue growth, strong profitability, and sound balance sheet management. The company's efficient cash flow generation further supports its financial health. While the balance sheet is stable, enhancing asset utilization could drive further improvements.

Income Statement

EssilorLuxottica SA shows a strong revenue growth trend with a 4.37% increase from 2023 to 2024. The company maintains solid profitability, evidenced by a gross profit margin of 63.41% and a net profit margin of 8.90% in 2024. The EBIT margin of 13.01% and EBITDA margin of 24.72% further underscore its robust operating performance. Consistent revenue growth and strong margins highlight a well-managed income statement.

Balance Sheet

The company has a healthy equity base with a debt-to-equity ratio of 0.33, indicating moderate leverage. The return on equity (ROE) is a respectable 5.84%, suggesting efficient use of equity capital. The equity ratio stands at 62.84%, reflecting a strong balance sheet with significant equity backing. Overall, the balance sheet exhibits stability, though there is room for improving asset utilization.

Cash Flow

EssilorLuxottica SA demonstrates a stable cash flow position with a free cash flow to net income ratio of 1.42, indicating strong cash generation relative to net income. The operating cash flow to net income ratio is 2.07, highlighting efficient cash conversion. Free cash flow growth was modest at 0.66% from 2023 to 2024, but the overall cash flow metrics suggest solid liquidity and operational cash control.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	26.51B	25.39B	24.49B	19.82B	14.43B
Gross Profit	16.81B	16.05B	15.59B	12.28B	8.49B
EBITDA	6.55B	6.18B	6.10B	4.71B	2.61B
Net Income	2.36B	2.29B	2.15B	1.45B	85.00M
Balance Sheet
Total Assets	64.26B	60.52B	60.56B	59.41B	52.32B
Cash, Cash Equivalents and Short-Term Investments	2.25B	2.56B	1.99B	3.33B	8.93B
Total Debt	13.22B	11.66B	12.20B	13.02B	11.89B
Total Liabilities	23.26B	21.63B	22.41B	23.54B	19.52B
Stockholders Equity	40.38B	38.24B	37.45B	35.06B	32.27B
Cash Flow
Free Cash Flow	3.35B	3.33B	3.21B	3.52B	2.30B
Operating Cash Flow	4.87B	4.86B	4.78B	4.54B	2.95B
Investing Cash Flow	-3.62B	-1.72B	-3.29B	-8.13B	-574.00M
Financing Cash Flow	-1.65B	-2.36B	-2.91B	-1.97B	1.59B

EssilorLuxottica SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 234.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:EL, the sentiment is Negative. The current price of 234.3 is below the 20-day moving average (MA) of 242.97, below the 50-day MA of 247.67, and below the 200-day MA of 240.63, indicating a bearish trend. The MACD of -3.77 indicates Positive momentum. The RSI at 36.41 is Neutral, neither overbought nor oversold. The STOCH value of 8.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:EL.

EssilorLuxottica SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EL	67 Neutral	€108.23B	45.08	6.00%	1.46%	4.38%	1.71%
Sector *	67 Neutral	¥253.98B	13.04	6.57%	2.83%	5.07%	-11.36%
HESAF		$278.99B	56.34	28.67%	3.80%	―	―
0NPL		€77.22B	14.83	22.73%	3.04%	―	―
0IIH		€22.58B	19.60	7.52%	7.54%	―	―
0HAU		€224.45B	17.81	19.53%	2.91%	―	―