EssilorLuxottica Shares Hit Two-Year Low Despite Double-Digit Growth
EssilorLuxottica drops 2.58% this Friday morning to 186.85 euros, breaking below its 2024 floor. The stock has fallen nearly 30% over three months, in a Parisian market that is also trending downward, with the CAC 40 declining by 1.05% during the session.
Significant Drop Amidst Strong Quarterly Results
This Friday, EssilorLuxottica's share price reached a two-year low at 186.85 euros, wiping out the previous floor of 186.80 euros recorded in 2024. This price level contrasts with the announcement on Wednesday, April 22, of a quarterly revenue of 7,127 million euros, up 10.8% at constant exchange rates, marking a third consecutive quarter of double-digit growth. Despite this, the group's strategy, backed by its optics activities, innovation in wearables, and the expansion of its global distribution network, continues to deliver robust commercial results. The stock has lost 27.38% over the past year and 9.69% over the last seven days. It now trades well below its 50-day moving average (212.87 euros) and 200-day moving average (260.88 euros), indicating a firmly established downward trend. The RSI, at 38, is approaching the oversold zone without having entered it yet, while the stock hovers near the lower Bollinger band (186.33 euros), confirming potential bearish excess. The general assembly scheduled for April 28 could be the next catalyst for the stock.
Investment Banks Reaffirm Confidence Despite Sharp Decline
Despite the marked decline, two major investment banks reaffirmed their confidence in the stock yesterday. UBS adjusted its price target from 315 to 312 euros while maintaining its buy recommendation. Morgan Stanley reduced its target more significantly, from 365 to 315 euros, but continues to rate the stock as overweight. At current levels, these targets suggest a revaluation potential of between 67% and 69% compared to this morning's price, an unusually high gap that reflects the divergence between the fundamentals perceived by analysts and the stock's market trajectory. On the Parisian market, other major luxury and consumer goods stocks are also under pressure this Friday: LVMH is down 1.67% and L'Oréal by 0.78% during the session. Geopolitical tensions in the Middle East, which are driving Brent crude above 106 dollars, weigh on the entire market by reviving inflation fears and pushing away the prospect of cuts in key interest rates. This deteriorated macroeconomic climate constitutes an additional headwind for growth stocks like EssilorLuxottica, whose valuation multiples are particularly sensitive to changes in interest rates.
