October 31, 2024
Top 10 Stock EssilorLuxottica 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 October 31, 2024 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 69 (high 69% performer), Obermatt assesses an overall buy recommendation for EssilorLuxottica on October 31, 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 Buy
| 360 METRICS | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 56 |
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| GROWTH | ||||||||
| GROWTH | 68 |
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| SAFETY | ||||||||
| SAFETY | 42 |
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| SENTIMENT | ||||||||
| SENTIMENT | 70 |
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| 360° VIEW | ||||||||
| 360° VIEW | 69 |
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ANALYSIS: With an Obermatt 360° View of 69 (better than 69% compared with alternatives), overall professional sentiment and financial characteristics for the stock EssilorLuxottica are above average. 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 56, 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 56% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 68, 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 70. But the company’s financing is risky with a Safety rank of 42. This means 58% of comparable companies have a safer financing structure than EssilorLuxottica. ...read more
RECOMMENDATION: With a consolidated 360° View of 69, EssilorLuxottica is better positioned than 69% 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 56), above-average growth (Growth Rank of 68), and positive market sentiment in the professional investor community (Sentiment Rank of 70), 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 42), 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 70 (better than 70% 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 49 (worse than 51% 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 17, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 80, which means that professional investors hold more stock in this company than in 80% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 85, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 85% 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 70 (more positive than 70% 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 better than average
ANALYSIS: With an Obermatt Value Rank of 56 (better than 56% 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 65% of comparable companies (a Dividend Yield rank of 65), 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 66, which means that the stock price is lower compared with invested capital than for 66% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 36 which means that the stock price compared with what market professionals expect for future profits is higher than for 64% 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 34. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 66% of comparable companies, indicating a low value concerning EssilorLuxottica's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 56, 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 good
ANALYSIS: With an Obermatt Growth Rank of 68 (better than 68% 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. Capital Growth has a rank of 54, which means that currently professionals expect the company to grow its invested capital more than 47% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 78 (above 78% of alternative investments). But Sales Growth has only a rank of 44, which means that, currently, professionals expect the company to grow less than 56% of its competitors, and Profit Growth is also low at a rank of 47. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 68, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for EssilorLuxottica, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: EssilorLuxottica Debt Financing Safety below-average
| SAFETY METRICS | October 31, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 63 |
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| REFINANCING | ||||||||
| REFINANCING | 4 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 73 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 42 |
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ANALYSIS: With an Obermatt Safety Rank of 42 (better than 42% 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 63, meaning the company has a below-average debt-to-equity ratio. It has less debt than 63% of its competitors. Liquidity is also good at a rank of 73, meaning the company generates more profit to service its debt than 73% 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 4, 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 96% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 42 (worse than 58% 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 | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 56 |
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| GROWTH | ||||||||
| GROWTH | 68 |
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| SAFETY | ||||||||
| SAFETY | 73 |
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| COMBINED | ||||||||
| COMBINED | 64 |
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ANALYSIS: With an Obermatt Combined Rank of 64 (better than 64% 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 56 (better than 56% of alternatives), show above-average growth (Growth Rank of 68) but are riskily financed (Safety Rank of 42), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 64, is a 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 56) and above-average growth (Obermatt Growth Rank of 68), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 42) 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
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