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 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 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.