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On Wednesday, RBC Capital Markets shifted its stance on EssilorLuxottica SA (EL:FP) (OTC: OTC:ESLOY), elevating the company’s stock rating from ’Sector Perform’ to ’Outperform’ and increasing the price target to €290.00, up from the previous €220.00. The upgrade by RBC Capital’s analysts was influenced by the company’s robust fundamentals and the potential for growth in the mid-term ophthalmology market.
EssilorLuxottica, known for its eyewear and eyecare products, has been recognized for its solid performance and the potential synergies with Bausch & Lomb, especially in the contact lens and cataract sectors. RBC Capital’s analysis suggests a possible earnings per share (EPS) increase of 3% for EssilorLuxottica, or 2% excluding the Pharma division, with the deal size being manageable at an enterprise value of €12 billion.
The analysts at RBC Capital have pointed out that despite a high valuation, EssilorLuxottica’s long-term growth prospects appear favorable. This optimism is supported by various product initiatives such as Meta (NASDAQ:META), Stellest, and Nuance, which complement the company’s core optical business. The raised price target reflects these anticipated developments and opportunities for expansion in the company’s market presence.
The upgrade and new price target indicate a positive outlook for EssilorLuxottica, as the analysts see the company well-positioned to capitalize on market opportunities and drive shareholder value. The endorsement from RBC Capital underscores the company’s strategic initiatives and the expected accretive impact on its financial performance.
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