Nucor earnings beat by $0.08, revenue fell short of estimates
On Thursday, UBS analyst Susy Tibaldi maintained a Neutral rating on EssilorLuxottica SA (EL:FP) (OTC: OTC:ESLOY) with a consistent price target of EUR266.00. The stock currently trades at $145.97, near its 52-week high of $149.24, after delivering impressive returns of 47% over the past year. According to InvestingPro analysis, the stock appears to be trading above its Fair Value. Tibaldi provided insight into the company’s recent performance and future outlook, acknowledging that the results aligned with UBS’s forecasts. Revenue exceeded consensus estimates, but profit margins fell short. The company maintains a healthy gross profit margin of 62.5% and generated revenue of $27.7 billion in the last twelve months, with modest growth of 1.91%.
EssilorLuxottica’s innovation pipeline was recognized as impressive; however, Tibaldi expressed surprise at the company’s reaffirmed mid-term margin guidance. The guidance suggests a margin of 19-20% by 2026, based on 2021 foreign exchange-neutral rates. This projection translates to approximately 18.6-19.6% at current rates, compared to UBS’s estimate of 18.1%. Achieving this would require nearly a 100 basis point expansion in margin annually, which Tibaldi views as ambitious, considering the estimated 50 basis point dilution from the introduction of smartglasses and ongoing strategic investments.
The analysis anticipates that EssilorLuxottica’s performance in 2025 will heavily rely on the successful launch of new products, given the seasonal nature of the business. The anticipated ramp-up of Nuance, coupled with a strong core business, is expected to shape the company’s trajectory in the upcoming year.
EssilorLuxottica, a leader in the eyewear and optical industry, continues to invest in innovation and strategic initiatives to bolster its market position. The reaffirmation of their margin guidance reflects confidence in their business strategy and growth prospects, despite the potential challenges highlighted by UBS. InvestingPro data reveals the company maintains a strong financial health score of 3.25 (rated as "GREAT"), with 15 additional exclusive insights available to subscribers, including detailed analysis of the company’s valuation metrics and growth potential.
In other recent news, EssilorLuxottica has been the focus of multiple analyst upgrades and adjustments. Jefferies upgraded EssilorLuxottica’s stock to Buy, raising the price target to EUR310, highlighting the company’s potential for accelerated earnings and possible expanded partnership with Meta (NASDAQ:META). Meanwhile, UBS analyst Susy Tibaldi increased EssilorLuxottica’s price target to EUR266, noting the company’s favorable position in the emerging smartglasses market, which could potentially reach an €80 billion market size by 2040.
RBC Capital Markets also elevated EssilorLuxottica’s stock rating to Outperform, increasing the price target to €290, citing the company’s robust fundamentals and potential for growth in the mid-term ophthalmology market. The analysts anticipate a possible earnings per share (EPS) increase of 3% for EssilorLuxottica, mainly due to potential synergies with Bausch & Lomb.
However, UBS shifted its rating from "Buy" to "Neutral" for EssilorLuxottica, despite an increase in the price target to EUR 248. The firm expressed caution regarding potential US tariffs and shifts in broader consumption patterns that could affect EssilorLuxottica’s performance. These recent developments reflect the dynamic nature of the investment landscape surrounding EssilorLuxottica.
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