ESSILORLUXOTTICA (EL.PA) Stock Fundamental Analysis
Europe - Euronext Paris - EPA:EL - FR0000121667 - Common Stock
257.3 EUR
-7.8 (-2.94%)
Taking everything into account, EL scores 4 out of 10 in our fundamental rating. EL was compared to 63 industry peers in the Health Care Equipment & Supplies industry. While EL is still in line with the averages on profitability rating, there are concerns on its financial health. While showing a medium growth rate, EL is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- EL had positive earnings in the past year.
- EL had a positive operating cash flow in the past year.
- In the past 5 years EL has always been profitable.
- Each year in the past 5 years EL had a positive operating cash flow.
1.2 Ratios
- EL's Return On Assets of 3.84% is in line compared to the rest of the industry. EL outperforms 57.14% of its industry peers.
- Looking at the Return On Equity, with a value of 6.29%, EL is in line with its industry, outperforming 50.79% of the companies in the same industry.
- The Return On Invested Capital of EL (5.39%) is comparable to the rest of the industry.
- The Average Return On Invested Capital over the past 3 years for EL is significantly below the industry average of 9.95%.
- The last Return On Invested Capital (5.39%) for EL is above the 3 year average (4.84%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.84% | ||
| ROE | 6.29% | ||
| ROIC | 5.39% |
ROA(3y)3.67%
ROA(5y)2.72%
ROE(3y)5.86%
ROE(5y)4.39%
ROIC(3y)4.84%
ROIC(5y)3.74%
1.3 Margins
- The Profit Margin of EL (8.74%) is better than 63.49% of its industry peers.
- EL's Profit Margin has improved in the last couple of years.
- EL's Operating Margin of 12.86% is fine compared to the rest of the industry. EL outperforms 60.32% of its industry peers.
- EL's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 61.91%, EL is in the better half of the industry, outperforming 65.08% of the companies in the same industry.
- In the last couple of years the Gross Margin of EL has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.86% | ||
| PM (TTM) | 8.74% | ||
| GM | 61.91% |
OM growth 3Y4.69%
OM growth 5Y6.47%
PM growth 3Y6.8%
PM growth 5Y7.52%
GM growth 3Y0.88%
GM growth 5Y0.39%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so EL is destroying value.
- Compared to 1 year ago, EL has more shares outstanding
- The number of shares outstanding for EL has been increased compared to 5 years ago.
- The debt/assets ratio for EL is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 4.03 indicates that EL is not in any danger for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 4.03, EL is in the better half of the industry, outperforming 68.25% of the companies in the same industry.
- The Debt to FCF ratio of EL is 4.18, which is a neutral value as it means it would take EL, 4.18 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 4.18, EL is in the better half of the industry, outperforming 65.08% of the companies in the same industry.
- A Debt/Equity ratio of 0.25 indicates that EL is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.25, EL is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 4.18 | ||
| Altman-Z | 4.03 |
ROIC/WACC0.69
WACC7.79%
2.3 Liquidity
- EL has a Current Ratio of 0.97. This is a bad value and indicates that EL is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Current ratio value of 0.97, EL is not doing good in the industry: 77.78% of the companies in the same industry are doing better.
- A Quick Ratio of 0.67 indicates that EL may have some problems paying its short term obligations.
- EL has a worse Quick ratio (0.67) than 73.02% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.67 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 3.00% over the past year.
- EL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.01% yearly.
- EL shows a small growth in Revenue. In the last year, the Revenue has grown by 5.45%.
- The Revenue has been growing by 8.80% on average over the past years. This is quite good.
EPS 1Y (TTM)3%
EPS 3Y13.7%
EPS 5Y16.01%
EPS Q2Q%2.1%
Revenue 1Y (TTM)5.45%
Revenue growth 3Y10.18%
Revenue growth 5Y8.8%
Sales Q2Q%5.52%
3.2 Future
- EL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.60% yearly.
- The Revenue is expected to grow by 7.56% on average over the next years.
EPS Next Y5.69%
EPS Next 2Y8.8%
EPS Next 3Y10.77%
EPS Next 5Y9.6%
Revenue Next Year5.99%
Revenue Next 2Y6.94%
Revenue Next 3Y7.45%
Revenue Next 5Y7.56%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 37.45, the valuation of EL can be described as expensive.
- EL's Price/Earnings is on the same level as the industry average.
- When comparing the Price/Earnings ratio of EL to the average of the S&P500 Index (27.25), we can say EL is valued slightly more expensively.
- A Price/Forward Earnings ratio of 32.01 indicates a quite expensive valuation of EL.
- 60.32% of the companies in the same industry are cheaper than EL, based on the Price/Forward Earnings ratio.
- EL's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.45 | ||
| Fwd PE | 32.01 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as EL.
- The rest of the industry has a similar Price/Free Cash Flow ratio as EL.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.44 | ||
| EV/EBITDA | 20.17 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The decent profitability rating of EL may justify a higher PE ratio.
PEG (NY)6.58
PEG (5Y)2.34
EPS Next 2Y8.8%
EPS Next 3Y10.77%
5. Dividend
5.1 Amount
- EL has a Yearly Dividend Yield of 1.47%.
- EL's Dividend Yield is a higher than the industry average which is at 0.96.
- EL's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.47% |
5.2 History
- The dividend of EL has a limited annual growth rate of 4.50%.
Dividend Growth(5Y)4.5%
Div Incr Years3
Div Non Decr Years4
5.3 Sustainability
- EL pays out 22.97% of its income as dividend. This is a sustainable payout ratio.
- EL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP22.97%
EPS Next 2Y8.8%
EPS Next 3Y10.77%
ESSILORLUXOTTICA / EL.PA FAQ
What is the ChartMill fundamental rating of ESSILORLUXOTTICA (EL.PA) stock?
ChartMill assigns a fundamental rating of 4 / 10 to EL.PA.
What is the valuation status for EL stock?
ChartMill assigns a valuation rating of 2 / 10 to ESSILORLUXOTTICA (EL.PA). This can be considered as Overvalued.
What is the profitability of EL stock?
ESSILORLUXOTTICA (EL.PA) has a profitability rating of 6 / 10.
What is the valuation of ESSILORLUXOTTICA based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ESSILORLUXOTTICA (EL.PA) is 37.45 and the Price/Book (PB) ratio is 3.15.
Can you provide the dividend sustainability for EL stock?
The dividend rating of ESSILORLUXOTTICA (EL.PA) is 6 / 10 and the dividend payout ratio is 22.97%.