Sometimes the market is shortsighted. And when it is, they appear opportunities that do not need a magnifying glassbut simply patience. That’s what he defends Eduardo Faustechnical analyst Rent 4, by focusing on EssilorLuxottica: a global leader who has gone from star to forgotten… without his business blinking.
A GLOBAL GIANT THAT CONTINUES TO GROW IN SILENCE EssilorLuxottica is not a promise, it is a perfectly oiled machine. Control between 20% and 25% of the world market for glasses and lenseswith a model of full vertical integration: designs, manufactures, distributes and sells, even in its own stores. “We are facing a global leader with iconic brands and a extraordinary cash generation capacity”summarizes Faus.
Ray-Ban, Oakley or Varilux They are not just names: they are barriers to entry. Added to that is a constant innovationfrom lenses for children’s myopia to glasses with audio or eye diagnostics. And meanwhile, the structural wind blows in favor: aging of the population and massive use of screens. More tired eyes, more demand. It’s that simple. A 38% FALL THAT CHANGES THE STORY Here comes the twist. The price has corrected 38% from November highs. And that, in terms of technical analysis, is not a minor detail. “Current levels leave historically exceeded parameters, which usually coincide with attractive purchase points in the medium and long term«, points out the analyst. Translated: the market has punished the price more than the fundamentals justify. And when that happens, the graph begins to speak… and whisper opportunity.
On the long-term chart, you can see how the price is approaching historical support zones, what Faus calls “larger soil zones”. That is, levels where historically the market has stopped selling. DISCOUNT VERSUS CONSENSUS: THE OTHER KEY CLUE Not only technical analysis points in the same direction. So does market consensus.
The current price is around 200 euros, while the average target price is around 316 euros. That implies a potential close to 55%, a gap that is difficult to ignore. “There is a profound undervaluation with respect to consensus prices,» emphasizes Faus. And here a key concept comes into play: when technique and valuation coincide, the probability of success increases. It is not a guarantee, but it is a powerful signal.
DIVIDEND, CASH AND CONTROLLED DEBT: THE DEFENSIVE TRIANGLE Beyond the graph, there is a solid foundation that supports the thesis.
EssilorLuxottica generates record cash flows, keeps debt under control and offers an attractive dividend policy. It is not a story of technological ‘hype’, it is a history of consistency.
“Forecasts for growth in sales, margins and profits reinforce the attractiveness at these levels«insists the analyst. In a market where many companies depend on future expectations, here is something more tangible: results.
CLEAR RECOMMENDATION: ‘BUY IN THE MEDIUM TERM’ The Renta 4 verdict leaves no room for doubt: recommendation of ‘buy in the medium term’ when describing the stock as a «clear opportunity». This implies a horizon of between 3 and 18 months, where the market should correct this disconnection between price and value. But be careful, this is not short-term trading. It is an idea of investment that requires patience and stomach. Because the market can remain irrational… for a while. WHEN THE MARKET DOESN’T SEE, THE INVESTOR MUST LOOK BETTER Faus’ thesis is almost poetic: a company that helps you see better… in a market that does not see it right now.
EssilorLuxottica combines what rarely coincides: global leadership, structural growth, financial solidity and a deep correction in price. That is to say, «discounted quality. And in the stock market, that is usually the purest definition of opportunity.
