Is Now The Time To Look At Buying EssilorLuxottica Société anonyme (EPA:EL)?

By
Simply Wall St
Published
March 15, 2022
ENXTPA:EL
Source: Shutterstock

Let's talk about the popular EssilorLuxottica Société anonyme (EPA:EL). The company's shares saw a decent share price growth in the teens level on the ENXTPA over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine EssilorLuxottica Société anonyme’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for EssilorLuxottica Société anonyme

What's the opportunity in EssilorLuxottica Société anonyme?

According to my valuation model, EssilorLuxottica Société anonyme seems to be fairly priced at around 11% below my intrinsic value, which means if you buy EssilorLuxottica Société anonyme today, you’d be paying a fair price for it. And if you believe that the stock is really worth €177.30, then there’s not much of an upside to gain from mispricing. What's more, EssilorLuxottica Société anonyme’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from EssilorLuxottica Société anonyme?

earnings-and-revenue-growth
ENXTPA:EL Earnings and Revenue Growth March 15th 2022

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for EssilorLuxottica Société anonyme. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? EL’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on EL, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Diving deeper into the forecasts for EssilorLuxottica Société anonyme mentioned earlier will help you understand how analysts view the stock going forward. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

If you are no longer interested in EssilorLuxottica Société anonyme, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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