March 21, 2024
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 March 21, 2024 in the market index CAC 40 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 76 (top 76% performer), Obermatt assesses an overall strong buy recommendation for EssilorLuxottica on March 21, 2024.
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 | March 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 71 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| SENTIMENT | ||||||||
| SENTIMENT | 81 |
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| 360° VIEW | ||||||||
| 360° VIEW | 76 |
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ANALYSIS: With an Obermatt 360° View of 76 (better than 76% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock EssilorLuxottica are very positive. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for EssilorLuxottica. The consolidated Value Rank has an attractive rank of 71, 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 that the stock price is lower than for 71% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 81, which means that professional investors are more optimistic about the stock than for 81% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 37, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 39, meaning the company has a riskier financing structure than 61 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 76, EssilorLuxottica is better positioned than 76% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 71) and positive market sentiment in the professional investor community (Sentiment Rank of 81), but growth expectations are below-average (Growth Rank of 37) and the financing structure is on the risky side(Safety Rank of 39). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of EssilorLuxottica is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for EssilorLuxottica very positive
ANALYSIS: With an Obermatt Sentiment Rank of 81 (better than 81% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock EssilorLuxottica is very positive. 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 40 (worse than 60% 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 37, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 100, which means that professional investors hold more stock in this company than in 100% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 76, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 76% 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 81 (more positive than 81% compared with investment alternatives), EssilorLuxottica has a reputation among professional investors that is significantly higher than 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 better than average
ANALYSIS: With an Obermatt Value Rank of 71 (better than 71% compared with alternatives), EssilorLuxottica shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for EssilorLuxottica. Expected dividend yields are higher than for 74% of comparable companies (a Dividend Yield rank of 74), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 75, which means that the stock price is lower compared with invested capital than for 75% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 46 which means that the stock price compared with what market professionals expect for future profits is higher than for 54% of comparable companies, indicating a low value concerning EssilorLuxottica's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for EssilorLuxottica with a rank of 37. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 63% of comparable companies, indicating a low value concerning EssilorLuxottica's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 71, is a buy recommendation based on EssilorLuxottica's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, EssilorLuxottica may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: EssilorLuxottica Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), EssilorLuxottica shows a below-average growth dynamic in its industry. There is limited momentum in this company. 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 56, which means that currently professionals expect the company to grow its profits more than 56% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 87 (above 87% of alternative investments). But Sales Growth has a below the median rank of 24, which means that, currently, professionals expect the company to grow less than 76% of its competitors, and Capital Growth also has a lower rank of 18. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold 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 | March 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 59 |
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| REFINANCING | ||||||||
| REFINANCING | 6 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 67 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 39 |
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ANALYSIS: With an Obermatt Safety Rank of 39 (better than 39% 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 59, meaning the company has a below-average debt-to-equity ratio. It has less debt than 59% of its competitors. Liquidity is also good at a rank of 67, meaning the company generates more profit to service its debt than 67% 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 6, 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 94% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 39 (worse than 61% 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 Above-Average Financial Performance
| COMBINED PERFORMANCE | March 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 71 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 67 |
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| COMBINED | ||||||||
| COMBINED | 51 |
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ANALYSIS: With an Obermatt Combined Rank of 51 (better than 51% compared with investment alternatives), EssilorLuxottica (Health Care Supplies, France) shares have above-average financial characteristics compared with similar stocks. Shares of EssilorLuxottica are a good value (attractively priced) with a consolidated Value Rank of 71 (better than 71% of alternatives) but show below-average growth (Growth Rank of 37), and are riskily financed (Safety Rank of 39), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 51, is a buy recommendation based on EssilorLuxottica's financial characteristics. As the company EssilorLuxottica's key financial metrics exhibit good value (Obermatt Value Rank of 71) but low growth (Obermatt Growth Rank of 37) and risky financing practices (Obermatt Safety Rank of 39), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 71% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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