Equity Valuation

: EssilorLuxottica SA

Abstract

Through the acquisition of the global eyewear retailer GrandVision, EssilorLuxottica has created an exciting healthcare group differentiating itself from peers by its unique vertical integration strategy. This thesis aims to determine the intrinsic value of this group by performing commercial, financial, and valuation analysis and to subsequently evaluate theattractiveness of an investment in the company for investors. EssilorLuxottica´s future growth is heavily linked to the development of the global eyecare market and positively affected by realized synergies and new market entries. It is anticipated that the company will be able to leverage its market-leading position to drive operational improvements and cash optimization. As a result of the analysis performed, this thesis confirms the attractiveness of EssilorLuxottica from an investment perspective with an intrinsic share price estimate of €189.35 trading at an estimated discount of 9-12% at year-end 2022, while providing a further 7% upside potential for 2023. Consequently, a “Buy” recommendation is proposed. Compared to current equity research of UBS, this is a more optimistic view since the bank has recently changed its house view from Buy to Hold based on inflationary pressures and pessimistic views on new market entries.

Date of Award	30 Jun 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)