August 10, 2023
Top 10 Stock EssilorLuxottica Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: EssilorLuxottica – Top 10 Stock in Cotation Assistée en Continu Index CAC 40
EssilorLuxottica is listed as a top 10 stock on August 10, 2023 in the market index CAC 40 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 84 (top 84% performer), Obermatt assesses an overall strong buy recommendation for EssilorLuxottica on August 10, 2023.
Snapshot: Obermatt Ranks
| Country | France |
| Industry | Health Care Supplies |
| Index | EURO STOXX 50, CAC 40, CAC All, SBF 120, Dividends Europe |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View EssilorLuxottica Strong Buy
| 360 METRICS | August 10, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 79 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 57 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 44 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 63 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 84 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 84 (better than 84% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock EssilorLuxottica are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for EssilorLuxottica. The consolidated Value Rank has an attractive rank of 79, which means that the share price of EssilorLuxottica is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 79% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 57, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 63. But the company’s financing is risky with a Safety rank of 44. This means 56% of comparable companies have a safer financing structure than EssilorLuxottica. ...read more
RECOMMENDATION: With a consolidated 360° View of 84, EssilorLuxottica is better positioned than 84% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 79), above-average growth (Growth Rank of 57), and positive market sentiment in the professional investor community (Sentiment Rank of 63), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 44), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of EssilorLuxottica is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for EssilorLuxottica positive
ANALYSIS: With an Obermatt Sentiment Rank of 63 (better than 63% compared with alternatives), overall professional sentiment and engagement for the stock EssilorLuxottica is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for EssilorLuxottica. Analyst Opinions are at a rank of 43 (worse than 57% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 35, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 92, which means that professional investors hold more stock in this company than in 92% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 64, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 64% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to EssilorLuxottica and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 63 (more positive than 63% compared with investment alternatives), EssilorLuxottica has a reputation among professional investors that is above-average compared with that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: EssilorLuxottica Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 79 (better than 79% compared with alternatives) for 2023, EssilorLuxottica shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for EssilorLuxottica. Price-to-Sales (P/S) is 52 which means that the stock price compared with what market professionals expect for future sales is lower than for 52% of comparable companies, indicating a good value for EssilorLuxottica's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 83. Finally, compared with other companies in the same industry, dividend yields of EssilorLuxottica are expected to be higher than for 76% of all competitors (a Dividend Yield rank of 76). The only low rank is for expected profits with a Price-to-Profit Rank of 40, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 79, is a buy recommendation based on EssilorLuxottica's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: EssilorLuxottica Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), EssilorLuxottica shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for EssilorLuxottica. Profit Growth has a rank of 70, which means that currently professionals expect the company to grow its profits more than 70% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 73 (above 73% of alternative investments). But Sales Growth has a below the median rank of 20, which means that, currently, professionals expect the company to grow less than 80% of its competitors, and Capital Growth also has a lower rank of 39. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for EssilorLuxottica. ...read more
Safety Strategy: EssilorLuxottica Debt Financing Safety below-average
| SAFETY METRICS | August 10, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 66 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 7 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 60 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 44 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 44 (better than 44% compared with alternatives), the company EssilorLuxottica has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of EssilorLuxottica is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for EssilorLuxottica. Leverage is at a rank of 66, meaning the company has a below-average debt-to-equity ratio. It has less debt than 66% of its competitors. Liquidity is also good at a rank of 60, meaning the company generates more profit to service its debt than 60% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 7, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 93% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 44 (worse than 56% compared with alternatives), EssilorLuxottica has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for EssilorLuxottica. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: EssilorLuxottica Top Financial Performance
| COMBINED PERFORMANCE | August 10, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 79 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 57 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 60 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 77 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 77 (better than 77% compared with investment alternatives), EssilorLuxottica (Health Care Supplies, France) shares have much better financial characteristics than comparable stocks. Shares of EssilorLuxottica are a good value (attractively priced) with a consolidated Value Rank of 79 (better than 79% of alternatives), show above-average growth (Growth Rank of 57) but are riskily financed (Safety Rank of 44), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 77, is a strong buy recommendation based on EssilorLuxottica's financial characteristics. As the company EssilorLuxottica's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 79) and above-average growth (Obermatt Growth Rank of 57), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 44) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.