Italian stock report - Luxottica Group

ITALY

Luxottica Group in 2nd consecutive fall, nears two-month low January 18, 2018 17:30 CET

NEWS BITES - EUROPE

Luxottica Group (MI:LUX), Italy's largest Personal & household goods company by market cap, slipped further on Thursday, sliding an additional 45.0c (0.9%) to trade at EUR50.05. The stock decreased 0.5% on Wednesday. This brought its 2-day fall to 1.4%, compared with the FTSE MIB Index which rose 135.5 points (0.6%) in the two days for a relative price change of -2.0%. Cumulative volume in the 2 days was 0.9 times the average 2-day volume of 539,154 shares. The stock is now approaching its 45-day low of EUR49.86.

Highlights in today's Report:

SECTION 1 BEARISH SIGNALS

Fundamentals, Overvaluation [compared with sector average], Technicals, Low Performance Indicators

SECTION 2 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, Oversold/Bullish/Support Signals, High Performance Indicators, A positive finish to 2017

SECTION 3 PRICE VOLUME DYNAMICS

Technicals, Moving Annual Return, Beta & Alpha, Turnover Rate & Turnover Period

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

Financials Summary, Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-, Trailing 12 Months Dividends

SECTION 6 PROFILE

Activities, Industry & Sector, Top Management, Issued Capital

SECTION 7 STOCK BUZZ

SECTION 1 LUXOTTICA GROUP BEARISH SIGNALS

1.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 1.8%, divided by average yield of dividend yielding stocks in the FTSE MIB Index of 2.4% is 78.3%. This suggests the stock is overvalued in dividend yield terms.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 2.4. Compared with the rest of the market the stock is overvalued and ranks in the bottom quartile of stocks by value of Q Ratio.

1.2 Overvaluation [compared with sector average]:

+ Price/Earnings of 28.3 [6.7].

1.3 Technicals:

Downtrend: The stock dropped on high volatility today.

+ The price decreased 0.4% in the last week and 1.9% in the last month.

1.4 Low Performance Indicators:

DescriptionValueRank In Market
EPS Growth %6In Bottom Quartile
Price Change %-0.9In Bottom Quartile

SECTION 2 LUXOTTICA GROUP BULLISH SIGNALS

2.1 Fundamentals:

+ Total Liabilities/EBITDA of 3.2 is comfortably below the Joseph Piotroski benchmark of 5.

+ Interest cover defined by EBIT/I is 17.2 times. This indicates it is less leveraged.

+ Net profit margin has averaged 9% in the last 3 years. This is better than the sector average of 1.3% and suggests a high margin of safety.

2.2 Undervaluation [compared with sector average]:

+ Return on Assets 8.3% [1.2%].

+ Return on Capital Employed 17.3% [13.3%].

+ Dividend yield of 1.8% [0.5%].

2.3 Technicals:

+ The present value of EUR1,000 (PV1000) invested ten years ago in Luxottica Group is EUR3,986, including a capital gain of EUR2,561 and dividend reinvested of EUR425.

+ 10 years Multiplier in EUR = 3.986x

+ Compound Annual Growth Rate (CAGR) in EUR = 14.8%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in Luxottica Group is $US3,286, including a capital gain of $US1,936 and dividend reinvested of $US351.

+ 10 years ago EUR 1 equalled USD 1.4786

+ 10 years Multiplier in USD = 3.286x

+ Compound Annual Growth Rate (CAGR) in USD = 12.6%

Jan 18, 2018: EUR 1 equals USD 1.22

2.4 Oversold/Bullish/Support Signals:

+ The stock is oversold according to the Williams % R indicator of -90.5, suggesting the price is close to its 14-day low of EUR49.86.

2.5 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverEUR26.4 million (US$32.2 million)In Top 5%
Return on Assets [ROA] %8.3In Top Quartile
Interest Cover17.2In Top Quartile
Return on Capital Employed [ROCE] %17.3In Top Quartile

2.6 A positive finish to 2017

The stock has increased EUR1.06 (or 2.1%) in FY 2017 to close at EUR51.15. The average daily volume of 579,159 shares in FY 2017 was 0.6 times the average daily volume in FY 2016.

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 527,180 shares worth EUR26.4 million (US$32.2 million) traded today. In the past week, volume was 0.8 times average and the shares were down 0.4%. The volume of 539,154 shares was close to average trading.

+ Luxottica Group is at a discount of 10.0% to its 12-month high of EUR55.60 on June 14, 2017. It is also at a premium of 10.4% to the 12-month low of EUR45.32 on October 23, 2017.

+ The present value of EUR1,000 (PV1000) invested one year ago in Luxottica Group is EUR983, comprising a capital loss of EUR34 and dividend reinvested of EUR17.

PV10001-week1-month1-year
LUX.MI996981983
FTSE MIB Index1,0141,0641,221

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 3 out of 5 years.

LUXClose (EUR)Dividends (EUR)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 1850.050.92(3.4)1.8(1.6)
1 Yr ago51.810.89(5.1)1.6(3.5)
2 Yrs ago54.61.4418.33.121.4
3 Yrs ago46.160.6533.31.935.2
4 Yrs ago34.620.5813.41.915.3

Close 5 years ago EUR30.52

3.3 Beta & Alpha:

+ Beta: the Beta of Luxottica Group stock is 0.3. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

+ Alpha: the Alpha of the stock is -2.5. The actual return of 5.91% fell short of the expected return of 8.4%, reflecting underperformance.

3.4 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 31.2% (or a turnover period of 3 years 2 months). This average length of ownership of the stock at 3.3 times the average holding period of 11 months for stocks in the FTSE MIB Index suggests a larger number of core investors, making a long-term investment safer.

SECTION 4 RANKING

4.1 Global Rank [out of 47,422 stocks] and Rank in the Europe Region [out of 8,526 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)29.6B514134
Total Assets (US$)12.6B2,356496
Revenue (US$)12.8B1,091272
Net Profit (US$)1B975212
Return on Equity %14.87,7611,562
Net Profit Margin %9.412,0121,905
Price to Book57.034,2585,290
Price/Earnings28.514,1532,771
Yield %1.812,4402,514
PV$1000 (1Year) US$*1,12921,4684,513
US$* Change (1Year) %11.721,1654,514

* 1 year ago EUR 1 = USD 1.07

Jan 18, 2018: EUR 1 equals USD 1.22

4.2 Independent Ratings

+ FT 500:

Luxottica Group is the 314th largest by revenue in the FT Global 500.

+ Newsweek 500:

It was ranked 444 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 5.1% in Carbon productivity.

+ Forbes 2000:

It is the 943rd largest by revenue in the Forbes Global 2000.

+ BSS/News Bites:

It is placed 232/283 in BSS News Bites' ranking of Italian performers in the past year, a percentile ranking of 19.

+ Vanguard Total World Stock ETF 7457:

The stock was one of 7457 global stocks selected by Vanguard Total World Stock ETF (VT). As at November 30, 2017, the Vanguard Total World Stock ETF held 41,527 shares worth $US2,394,032 or 0.02% by value of the ETF's portfolio [Ranked 1014 out of 7457 by value and 12 out of 91 for Italy].

SECTION 5 LUXOTTICA GROUP FINANCIALS

5.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)12.612.39.2
Pretax (USD B)1.61.51.3
Net (USD)1B968.9M774.3M
EPS (EUR)1.771.671.34

Net profit was up 5.8% from US$968.9 million in 2015 to US$1 billion in 2016. Earnings Per Share (EPS) was up 6% from EUR1.67 to EUR1.77.

5.2 Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-

Favourable Changes:

+ Net profit up 5.8% from EUR804.1m ($US877.1m) to EUR850.5m ($US897.1m)

+ Total revenue up 2.2% from EUR10.2b ($US11.2b) to EUR10.4b ($US11.0b).

+ EPS up 6% from EUR1.67 ($US1.82) to EUR1.77 ($US1.87).

+ Interest cover up 32% from 13.0 to 17.2.

+ Administration expenses to Sales down from 12.3% to 10.6%.

+ Sales and marketing expenses to Sales down from 8.6% to 8.1%.

+ Fixed Assets to Total Assets up from 14.9% to 16.2%.

+ Current Debtors to Total Assets up from 8.9% to 9.1%.

+ Total Liabilities to EBITDA of 3.2 compares favourably with the Joseph Piotroski benchmark of <5. However, it has deteriorated by 5.2% from the previous year's ratio of 3.1.

+ Total Liabilities to Operating Cash Flow of 3.4 compares favourably with the Joseph Piotroski benchmark of <4. This ratio has improved by 2.5% from the previous year's ratio of 3.5.

+ Net tangible assets per share up 16.9% from EUR0.77 (US84.5c) to EUR0.9 (US94.4c).

Unfavourable Changes:

+ EBIT to total assets down from 14.3% to 13.6%.

+ Total revenue to total assets down from 1.1 to 1.0.

+ Cost of Goods Sold to Sales up from 32.1% to 34.7%.

+ Current ratio down 7.4% from 1.5 to 1.4.

+ Working capital to total assets down from 9.6% to 7.9%.

Note:

+ EBIT Margin steady at 15.4%.

+ Total non-current assets to Total Assets down from 70.7% to 70.6%.

+ Intangibles to Total Assets down from 52.2% to 51.9%.

+ Total current assets to Total Assets up from 29.3% to 29.4%.

5.3 Trailing 12 Months Dividends

Trailing 12 Months ToValue (c)
18 Jan 201892
18 Jan 201789
18 Jan 2016144
18 Jan 201565
18 Jan 201458

SECTION 6 LUXOTTICA GROUP PROFILE

6.1 Activities

Luxottica Group is a leader in eyewear having a brand portfolio that includes Ray-Ban, Bvlgari, Burberry, Chanel, Dolce & Gabbana, Donna Karan, Polo Ralph Lauren, Prada, Versace, Vogue, Persol, Arnette and REVO.

6.2 Industry & Sector

Classification LevelName of Sector
Business SectorPersonal & Household Products & Services
Economic SectorConsumer Non-Cyclicals

6.3 Top Management

The chairman is Leonardo Del Vecchio and the chief executive officer is Francesco Milleri.

6.4 Issued Capital

Based on 484,940,000 issued shares the market capitalisation is EUR24.3 billion (US$29.6 billion).

SECTION 7 STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

November 07 2017: Luxottica Group: By Laws October 31, 2017

Milan, Italy, November 7, 2017 - Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX) announced that the Company's By-laws, which have been updated with the issued share capital as of October 31, 2017, are available on the Company's website at www.luxottica.com in the Governance/By-Laws section and on the authorized central storage mechanism eMarket Storage available at www.emarketstorage.com.

November 03 2017: LUX' LUXOTTICA: NOTICE OF CHANGE IN SHARE CAPITAL

Luxottica Group S.p.A. hereby provides notice of the new composition of the fully paid-up share capital as of October 31, 2017, which have been filed for registration in the Milan Company Register on November 2, 2017 following a share capital increase subscribed by employees pursuant to the share capital increase approved by the shareholders at meeting held on June 14, 2006.

May 15 2017: Luxottica Group announces dividend

Luxottica Group today announced a cash dividend of 92.0c per share. The ex dividend date is Monday, May 22, 2017 and it is payable on Wednesday, May 24.

March 27 2017: Luxottica Group: Excerpt of the Shareholders' Agreement between Essilor International and Delfin

Milan (Italy), March 27, 2017 - Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX), in accordance with applicable regulations, discloses to the public the excerpt published today on the Italian newspaper "Corriere della Sera" and concerning the provisions amounting to a "Shareholders' Agreement" of the agreement between Essilor International and Delfin already communicated to the public on January 16, 2017.

March 24 2017: Luxottica Group: Board of Directors Report for ordinary meeting of stockholders now publicly available

Milan, March 24, 2017 - Luxottica Group S.p.A. (NYSE: LUX; MTA: LUX), announced today that the Board of Directors Report for the Ordinary Stockholders Meeting to be convened on April 28, 2017 is available to the public at the Company's registered office, on the Company's website www.luxottica.com in the Governance/General Meeting section, and on the "eMarket Storage" platform at www.emarketstorage.com.

Contact: +39 02 86334.1

Physical Address: Via Cantu, 2 Milano 20123 MI Italy

State/Province/Country: Italy

Exchange: Borsa Italiana

ISIN: IT0001479374

MI:LUX; BIT:LUX; IM:LUX; LUX.MI

PermID: 4295875513

Source: www.BuySellSignals.com