Essilor: UBS downgrades 'buy' rating
(CercleFinance.com) - After its 18% rise over the past six months, UBS has now downgraded its buy rating on the Essilor International share.
With a "neutral" rating on the stock of the French giant ophthalmic optical giant, (which will soon become EssilorLuxottica), analysts have cut their 12-month target price for the share from 139 euros to 130 euros. The broker also maintains its neutral rating on Luxottica, with an adjusted target price of 60 euros.
Keenly awaited, Essilor's merger with Luxottica now appears to be nearing completion by the end of the third quarter. This merger is also expected to create value by improving services to wholesale clients in the US. However, UBS believes that the combination of both entities does not deserve a premium relative to historical multiples, with structural risks having increased.
Adjusting their estimates to take into account the future EssilorLuxottica, analysts' 2019 EPS estimates are now around 2% below the consensus. They also believe that the Essilor share is trading at an unattractive 2019 EV/EBITDA multiple of 14x (in pro-forma data). This represents a premium of about 18% over the average level over the past nine years.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
With a "neutral" rating on the stock of the French giant ophthalmic optical giant, (which will soon become EssilorLuxottica), analysts have cut their 12-month target price for the share from 139 euros to 130 euros. The broker also maintains its neutral rating on Luxottica, with an adjusted target price of 60 euros.
Keenly awaited, Essilor's merger with Luxottica now appears to be nearing completion by the end of the third quarter. This merger is also expected to create value by improving services to wholesale clients in the US. However, UBS believes that the combination of both entities does not deserve a premium relative to historical multiples, with structural risks having increased.
Adjusting their estimates to take into account the future EssilorLuxottica, analysts' 2019 EPS estimates are now around 2% below the consensus. They also believe that the Essilor share is trading at an unattractive 2019 EV/EBITDA multiple of 14x (in pro-forma data). This represents a premium of about 18% over the average level over the past nine years.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.