ESSILORLUXOTTICA (ESL.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ESL - FR0000121667 - Common Stock
266.2 EUR
-0.5 (-0.19%)
We assign a fundamental rating of 4 out of 10 to ESL. ESL was compared to 67 industry peers in the Health Care Equipment & Supplies industry. While ESL is still in line with the averages on profitability rating, there are concerns on its financial health. ESL is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- ESL had positive earnings in the past year.
- ESL had a positive operating cash flow in the past year.
- Each year in the past 5 years ESL has been profitable.
- ESL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- ESL has a Return On Assets of 3.84%. This is comparable to the rest of the industry: ESL outperforms 55.22% of its industry peers.
- The Return On Equity of ESL (6.29%) is comparable to the rest of the industry.
- ESL's Return On Invested Capital of 5.39% is in line compared to the rest of the industry. ESL outperforms 49.25% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for ESL is below the industry average of 9.84%.
- The 3 year average ROIC (4.84%) for ESL is below the current ROIC(5.39%), indicating increased profibility in the last year.
| 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 ESL (8.74%) is better than 61.19% of its industry peers.
- ESL's Profit Margin has improved in the last couple of years.
- The Operating Margin of ESL (12.86%) is comparable to the rest of the industry.
- In the last couple of years the Operating Margin of ESL has grown nicely.
- With a decent Gross Margin value of 61.91%, ESL is doing good in the industry, outperforming 64.18% of the companies in the same industry.
- ESL's Gross Margin has been stable in the last couple of years.
| 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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ESL is destroying value.
- ESL has more shares outstanding than it did 1 year ago.
- ESL has more shares outstanding than it did 5 years ago.
- ESL has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 4.05 indicates that ESL is not in any danger for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 4.05, ESL is in the better half of the industry, outperforming 71.64% of the companies in the same industry.
- ESL has a debt to FCF ratio of 4.18. This is a neutral value as ESL would need 4.18 years to pay back of all of its debts.
- ESL has a Debt to FCF ratio of 4.18. This is in the better half of the industry: ESL outperforms 65.67% of its industry peers.
- ESL has a Debt/Equity ratio of 0.25. This is a healthy value indicating a solid balance between debt and equity.
- With a decent Debt to Equity ratio value of 0.25, ESL is doing good in the industry, outperforming 68.66% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 4.18 | ||
| Altman-Z | 4.05 |
ROIC/WACC0.69
WACC7.81%
2.3 Liquidity
- ESL has a Current Ratio of 0.97. This is a bad value and indicates that ESL is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Current ratio value of 0.97, ESL is not doing good in the industry: 79.10% of the companies in the same industry are doing better.
- A Quick Ratio of 0.67 indicates that ESL may have some problems paying its short term obligations.
- ESL has a worse Quick ratio (0.67) than 74.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.67 |
3. Growth
3.1 Past
- ESL shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.00%.
- ESL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.01% yearly.
- The Revenue has been growing slightly by 5.45% in the past year.
- ESL shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.80% yearly.
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
- ESL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.60% yearly.
- Based on estimates for the next years, ESL will show a small growth in Revenue. The Revenue will grow by 7.56% on average per year.
EPS Next Y7.24%
EPS Next 2Y9.47%
EPS Next 3Y10.9%
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 38.75, the valuation of ESL can be described as expensive.
- Compared to the rest of the industry, the Price/Earnings ratio of ESL is on the same level as its industry peers.
- The average S&P500 Price/Earnings ratio is at 27.21. ESL is valued slightly more expensive when compared to this.
- A Price/Forward Earnings ratio of 32.71 indicates a quite expensive valuation of ESL.
- Based on the Price/Forward Earnings ratio, ESL is valued a bit more expensive than the industry average as 64.18% of the companies are valued more cheaply.
- When comparing the Price/Forward Earnings ratio of ESL to the average of the S&P500 Index (24.26), we can say ESL is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.75 | ||
| Fwd PE | 32.71 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as ESL.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ESL is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.66 | ||
| EV/EBITDA | 20.28 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- ESL has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)5.35
PEG (5Y)2.42
EPS Next 2Y9.47%
EPS Next 3Y10.9%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.40%, ESL has a reasonable but not impressive dividend return.
- ESL's Dividend Yield is a higher than the industry average which is at 0.95.
- ESL's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
5.2 History
- The dividend of ESL has a limited annual growth rate of 4.50%.
Dividend Growth(5Y)4.5%
Div Incr Years2
Div Non Decr Years3
5.3 Sustainability
- 22.97% of the earnings are spent on dividend by ESL. This is a low number and sustainable payout ratio.
- ESL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP22.97%
EPS Next 2Y9.47%
EPS Next 3Y10.9%
ESSILORLUXOTTICA / ESL.DE FAQ
What is the ChartMill fundamental rating of ESSILORLUXOTTICA (ESL.DE) stock?
ChartMill assigns a fundamental rating of 4 / 10 to ESL.DE.
What is the valuation status for ESL stock?
ChartMill assigns a valuation rating of 2 / 10 to ESSILORLUXOTTICA (ESL.DE). This can be considered as Overvalued.
Can you provide the profitability details for ESSILORLUXOTTICA?
ESSILORLUXOTTICA (ESL.DE) has a profitability rating of 6 / 10.
What is the expected EPS growth for ESSILORLUXOTTICA (ESL.DE) stock?
The Earnings per Share (EPS) of ESSILORLUXOTTICA (ESL.DE) is expected to grow by 7.24% in the next year.
How sustainable is the dividend of ESSILORLUXOTTICA (ESL.DE) stock?
The dividend rating of ESSILORLUXOTTICA (ESL.DE) is 5 / 10 and the dividend payout ratio is 22.97%.