RBC: EssilorLuxottica's Q3 Results to Reflect 'More Normalized' Revenue Growth Profile; Price Target Down

08:55 AM EDT, 09/22/2026 (MT Newswires) -- RBC Capital Markets expects EssilorLuxottica (EL.PA) to see a year-over-year increase in third-quarter revenue amid assumptions of a "more normalized" sales growth when it releases its latest financial results on Oct. 20. The French eyewear manufacturer's group revenue is projected to reach 7.4 billion euros in the quarter, up 8% on a reported basis and 6.6% at constant currency, according to a Tuesday note. "We expect 3Q26 print to reflect a more normalized revenue growth profile with the Core (ex Smartglasses) business remaining healthy at +4-5% cFX growth and contribution from Smartglasses similar to 2Q26 at +~2%. Given recent stock underperformance and 19x CY27E P/E valuation, the setup is approaching a floor in terms of growth expectations re-base towards more realistic levels but with some adjustments to come (e.g. FY27E organic +9% cons vs +6% RBCe) which we believe will be the last leg down," analysts said. "Underlying business quality remains unchanged whilst valuation is dislocated on the back of the Smartglass revenue and valuation merry-go-round which should normalize once competitor products are purchasable and EL growth assumptions rebase." Against this backdrop, the research firm lowered its 2026 and 2027 adjusted EPS assumptions by 5% and 7%, respectively, whereas that for 2028 was cut by 10%. Group revenue forecasts over the three-year period were also downwardly revised, mainly due to a recalibration of artificial intelligence Smartglasses contribution. As such, the price target was reduced to 190 euros from 230 euros, while the stock's outperform rating was maintained.