EssilorLuxottica Sinks Toward 52-Week Low as Kepler Flips to Bearish and Family Tensions Simmer

Kepler Cheuvreux cut EssilorLuxottica to Reduce from Buy, slashing its target to EUR 135, below the stock's close of EUR 138.70.

A double downgrade from Kepler Cheuvreux has knocked EssilorLuxottica off its footing, sending the eyewear giant's shares to the brink of a fresh 52-week low and reviving uncomfortable questions about both its growth narrative and the cohesion of its controlling family.

The Paris-based analyst house cut its rating on the Franco-Italian group straight from "Buy" to "Reduce" and slashed its price target from EUR 244 to EUR 135 — a level that sits below where the stock was already trading. Word of the revision shaved as much as 3% off the share price during the session.

Kepler's case rests on two pillars: mounting doubts over the pace of growth in connected eyewear, or "smart glasses," and fears that margins face structural dilution that could weigh on future earnings. The call lands awkwardly, given that smart glasses have long served as the centerpiece of the company's pitch to investors as its next engine of expansion.

A Valuation Story Under Pressure

Should that narrative wobble, EssilorLuxottica stands to lose more than a single growth driver — it would surrender a chunk of the justification underpinning its valuation. The stock closed Friday at EUR 138.70, barely above the 52-week trough of EUR 138.00 touched the same day. Since the start of the year, the shares have shed 49%.

The selling has been relentless enough to push the relative strength index down to 23, a reading that signals a deeply oversold condition. For the bulls, that technical extreme suggests the market has already priced in a great deal of bad news — though it offers no guarantee of an imminent rebound.

Board Closes Ranks

Countering the gloom is a show of unity from the top. Roughly a week ago, the supervisory board unanimously reaffirmed its confidence in Chairman and CEO Francesco Milleri alongside Deputy CEO Paul du Saillant, throwing its weight behind the management team and endorsing the group's medium- and long-term strategy. That statement followed a wave of media coverage and public commentary that had stirred unease.

The turbulence traces back to Leonardo Maria Del Vecchio, son of the group's late founder Leonardo Del Vecchio, who pressed for a new corporate strategy amid criticism of management. His demands explicitly covered a review of governance and of how capital has been allocated. Reuters reported on September 7 that Del Vecchio had also addressed a letter to the auditors of the family holding Delfin, calling for an investigation into alleged governance conflicts. The status of that matter remains unresolved, yet its very existence feeds doubts about how unified the owning family really is.

Since Del Vecchio's exit, the stock has lost 5.7% — evidence that the leadership question alone cannot account for the weakness.

Where the Two Threads Meet

The more serious risk lies in how these two storylines interact. If other research houses echo Kepler's skepticism on smart glasses, the internal criticism gains credibility — even with the board currently standing squarely behind management. A weakened governance perception colliding with fading faith in the growth strategy could entrench the downward pressure, oversold technicals notwithstanding.

Much now hinges on whether the supervisory board's solidarity holds and whether rival analysts follow Kepler's lead. Should neither element crack, there is room for a technical stabilization near the annual low. But a fresh wave of criticism from the founder family's orbit, or further downgrades tied to smart-glasses doubts, would likely send the shares back under pressure.

Investors will be watching two things closely in the weeks ahead: whether more analysts sign on to Kepler's view, and how the dispute over Delfin's governance unfolds. Either could set the next direction for the stock.