In Paris Essilux down after accounts, analysts split between optimists and cautious

(Il Sole 24 Ore Radiocor) - Essilorluxottica down sharply on the Paris Stock Exchange (CAC 40 ), in the aftermath of the release of Q1 2026 revenues, although they are in double digits at constant exchange rates. The numbers, however, were in line with expectations, while investors expected more. In addition, doubts remain on the demand for smart glasses and especially on the margins these products provide for the group.

In detail, Essilorluxottica ended the January-March period with sales of EUR 7.12 billion, up 10.8% at constant exchange rates or 4.1% at actual exchange rates. North America posteddouble-digit growth, while all other regions reported high-single digit growth. On the conference call, Stefano Grassi, the CFO, pointed out that the Middle East region is practically insignificant for the group and threw water on the fire about possible production bottlenecks that could arise due to the war, as was the case in the post-Covid period.

Francesco Milleri and Paul du Saillant, president and ceo respectively, emphasised that the group's strategy is increasingly focused on med tech and science. Meanwhile, this morning Essilux announced theacquisition of Faro, an Italian company with more than 20 years of experience in the design, production and distribution of high-precision CNC milling and diamond grinding machinery dedicated to the eyewear and jewellery sectors. "The acquisition further expands EssilorLuxottica's vertical integration model, expanding its technological capabilities," the company explained.

Analysts are divided between optimists and pessimists and above all are confused about the multiples to be applied to the company, not knowing whether to consider it a luxury company or rather a med-tech or technology company. "The strategy of accelerating on med-tech may be appreciable, but in recent years it is the worst performing sector," pointed out one analyst. In the meantime, Berstein still confirmed caution (Market-Perform with target at EUR 185) on the shares, continuing to question the group's future and especially the performance of the so-called smart glasses, which for now, according to the business house, guarantee modest margins and are also subject to the blows of unbridled competition from giants such as Google and Apple. In short, Bernstein pointed out, Essilux's shares could in the future be subject tofluctuations according to the technological innovations announced on the market both by the group and its competitors.

For the business house, the group "in the first quarter of 2026 EssilorLuxottica is in a delicate situation. The traditional eyewear business continues to grow, but at the same time the growth of wearable devices seems to have slowed,' although the company did not provide exact numbers on this. Bernstein explains, however, that 'faster growth in wearable devices would have caused concern among investors due to the dilution of margins observed in the fiscal year 2025 budget. However, too slow growth would have called into question the high expectations for the near term embedded in consensus estimates'. For Bernstein 'thefirst quarter 2026 does not resolve the debate. Such clarity may only come in 2027'. On the conference call, however, Grassi reassured that as more and more AI Glasses are sold, the margins for such products will also tend to improve.