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Investing.com - BofA Securities upgraded EssilorLuxottica SA (EPA:EL) (OTC:ESLOY) from Neutral to Buy on Friday, raising its price target to EUR342.00 from EUR284.00 following the company’s strong third-quarter performance.
The eyewear giant reported 11.7% constant currency growth in Q3, significantly exceeding the consensus estimate of 8.5% and BofA’s own projection of 9.5%. This represented a 4.4 percentage point sequential acceleration compared to the first half of the year, which saw 7.3% growth.
BofA highlighted three key factors driving the outperformance: the benefit exceeded the low comparison base advantage of 1.2 percentage points; the traditional sunglasses and vision care business grew 5% at constant currency versus approximately 4% in the first half; and smart glasses sales reached EUR250-300 million, contributing over 4 percentage points to group growth.
The firm noted the robust performance across distribution channels, with both direct and wholesale channels showing strong growth between 11.5% and 12.0% at constant currency. Geographic performance was also encouraging, with acceleration focused on the more predictable EMEA and North America regions.
BofA Securities indicated that despite a tougher comparison base in the fourth quarter, with organic sales growth estimated to increase from 4% in Q3 2024 to 6% in Q4 2024, EssilorLuxottica has started October with further acceleration.
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