At €203, Is It Time To Put EssilorLuxottica Société anonyme (EPA:EL) On Your Watch List?

EssilorLuxottica Société anonyme (EPA:EL) saw a decent share price growth of 15% on the ENXTPA over the last few months. The company is now trading at yearly-high levels following the recent surge in its share price. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on EssilorLuxottica Société anonyme’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for EssilorLuxottica Société anonyme

What's The Opportunity In EssilorLuxottica Société anonyme?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 8.47% above our intrinsic value, which means if you buy EssilorLuxottica Société anonyme today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth €187.42, there’s only an insignificant downside when the price falls to its real value. 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?

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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. EssilorLuxottica Société anonyme's earnings over the next few years are expected to increase by 58%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in EL’s positive outlook, 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 conviction to buy should the price fluctuates below the true 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 positive outlook 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.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.