EssilorLuxottica : A support level that should be taken advantage of

05/25/2023 | 02:24am EDT

long trade Stop-loss triggered

Entry price : 174.52€ | Target : 186.56€ | Stop-loss : 170€ | Potential : 6.9%

Pursuant to the correction that has taken place in recent weeks with respect to the shares in EssilorLuxottica, further downside risk now appears limited by close and important technical support levels at 171.9 EUR. Investors have an opportunity to buy the stock and target the € 186.56.

Summary

• The company has a good ESG score relative to its sector, according to Refinitiv.

Strengths

• The company's EBITDA/Sales ratio is relatively high and results in high margins before depreciation, amortization and taxes.

Weaknesses

• The company's valuation in terms of earnings multiples is rather high. Indeed, the firm is getting paid 28.8 times its estimated earnings per share for the ongoing year.

With an enterprise value anticipated at 3.4 times the sales for the current fiscal year, the company turns out to be overvalued.

The valuation of the company is particularly high given the cash flows generated by its activity.

The overall consensus opinion of analysts has deteriorated sharply over the past four months.

Financial statements have repeatedly disappointed market stakeholders. Most often, they were below expectations.

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