Investing.com – EssilorLuxottica (EPA:ESLX) shares were up on Friday after reporting strong financial performance for the first half of 2024, underpinned by solid revenue growth and margin expansion.
The eyewear giant reported a 5.3% increase in revenue at constant exchange rates to €13.29 billion, demonstrating continued momentum across all regions and business segments. The adjusted operating profit margin reached 18.8%, reflecting a 50 basis point year-on-year improvement.
The company in a conference call said that Meta (NASDAQ:META) Platforms is keen on acquiring a stake in the company. The eyewear giant's CEO, Francesco Milleri, confirmed Meta's interest in becoming a shareholder, potentially deepening their long-standing collaboration on smart glasses technology.
“We are proud that a company that knows us very well, after years of partnership, is convinced that our company can grow and make much better in the future,” he said.
Analysts from RBC (TSX:RY) Capital Markets, in a note, said that recent acquisitions like Heidelberg Engineering and Supreme are expected to broaden EssilorLuxottica's product offering, technological base, and customer reach.
However, the analysts flagged potential concerns, including weaker-than-expected performance in North America and the possibility that cost pressures may outweigh the benefits of price and mix improvements.
The company's two key growth drivers were EMEA and Asia-Pacific, with both regions seeing double-digit growth. EssilorLuxottica's Stellest myopia management portfolio and Ray-Ban Meta wearables continued to grow exponentially.
RBC rates EssilorLuxottica as “Sector Perform” with a price target of €200. The analysts view the stock as a high-quality company with a defensive business model but believe the stock is fairly valued at this time.