Kepler Cheuvreux's Blunt Downgrade Forces EssilorLuxottica to Defend Its Valuation Story
Published on 09/19/2026 at 16:20 | Editorial boerse-global.de
A rare double-notch downgrade has put EssilorLuxottica on the back foot, with Kepler Cheuvreux stripping the eyewear giant of its "buy" rating and slashing its price target by nearly half. Analyst Alessandro Cuglietta moved the stock straight to "reduce" on Thursday, cutting his target to EUR 135 from EUR 244 — a revision that lands at an awkward moment for a company already navigating governance questions and a bruised share price.
The market's reaction was swift. On Friday the stock touched a fresh 52-week low of EUR 138.00 before closing at EUR 138.70, leaving it down 49% since the start of the year. According to Bloomberg, the shares have surrendered more than half their value since last November. With the new target now within striking distance of the current price, Kepler's reassessment implies that much of the premium investors once granted the company may no longer be justified.
Three Fronts of Concern
Cuglietta's case rests on a trio of pressures. First, he sees fading momentum in smart glasses — the connected eyewear segment long billed as a future earnings engine. Market reception has been tepid, and the category is increasingly exposed to tightening data-protection scrutiny. Second, governance worries persist around the Del Vecchio family holding, keeping some investors on the sidelines.
Those concerns have not been quieted by the board's recent show of support. Just over a week ago, the supervisory board unanimously backed Chairman and CEO Francesco Milleri along with Deputy CEO Paul du Saillant, reaffirming full confidence in the group's medium- and long-term direction. For Kepler's analysts, that endorsement was not enough to dispel doubts about what lies ahead.
Should investors sell immediately? Or is it worth buying EssilorLuxottica?
Buybacks and Clinical Data as Counterweights
EssilorLuxottica has not stood still. At the end of August it announced a buyback program covering up to 5,000,000 of its own shares, a move aimed at steadying the stock and underscoring confidence in value creation. The company has already put that capital to work: between August 31 and September 3 it repurchased 424,681 shares at a weighted average price of EUR 159.0096.
Beyond the balance sheet, there is product substance to lean on. In August, the specialist journal JAMA Ophthalmology published 24-month results from a US clinical study of Essilor's Stellest lenses — scientific backing that reinforces the group's standing in the high-margin myopia-correction business. If management can convert such technological advances into faster organic growth, the recent selling wave could yet prove an overshoot, opening room for a recovery toward earlier valuation ranges.
What Hinges on EUR 138
The near-term picture now turns on a single level. As long as the freshly marked EUR 138.00 holds, a volatile bottoming-out remains possible — though investors should brace for a test of the EUR 135 mark that Kepler has set as fair value. A sustained break below that floor would risk ushering in a new leg of technical downside.
Should other research houses follow Kepler's lead, the threat of continued institutional outflows looms larger. The bear case also assumes that headwinds in the consumer goods sector could dampen demand for eyewear and lenses more sharply than anticipated — and that if buybacks of up to five million shares fail to brake the decline, a key tool for supporting the price will have been spent for nothing. The next real litmus test will be the coming months of operating performance, when investors will want hard evidence that management can deliver on the earnings path it has reaffirmed. Until then, the stock remains in a delicate phase of price discovery, with fresh analyst calls and the steady execution of the repurchase program setting the tempo.
Ad
EssilorLuxottica Stock: New Analysis - 19 September
Fresh EssilorLuxottica information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
