EssilorLuxottica shares have been downgraded by UBS from Buy to Neutral, although the price target has been raised from 232 to 248 euros.

UBS remains positive about the eyewear manufacturer's prospects, expecting increased sales growth in the fourth quarter of 2024 due to innovation and mergers & acquisitions. UBS emphasizes the company's defensive profile and significant exposure to the strengthening dollar, with around 43% of sales coming from the USA. However, the downgrade is due to concerns about short-term risks, such as potential US customs duties that could impact Ebit by up to 12%. There are also worries that a broader consumer recovery may result in a shift in flows from EssilorLuxottica to higher-beta names. Consequently, UBS has adjusted its earnings per share estimates for 2024, 2025, and 2026, reducing them by 3%, 1%, and 3% respectively.