(CercleFinance.com) – UBS announced on Wednesday that it had lowered its recommendation on EssilorLuxottica from ‘buy’ to ‘neutral’, with a price target reduced from 210 to 183 euros.
In a note released in the morning, the Swiss bank justifies its decision by the prospect of less predictable consumption against a backdrop of persistent inflation.
If the Swiss establishment recalls that the activity of EssilorLuxottica cannot be related to discretionary consumption (i.e. non-constrained) because of its 75% exposure to optical lenses, it highlights , based on recent discussions with industry players, of an increased risk of consumer deferrals.
This phenomenon could lead to an extension of replacement cycles which could in turn penalize the growth of turnover, to which are added inflationary pressures which weigh on profit margins, he continues.
In this perspective, UBS explains that it prefers to stay away from the title pending better visibility on the volumes of activity and on the evolution of inflationary pressures.
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