EssilorLuxottica's AI Raybans Will Drag Margins, RBC Warns -- Market Talk

Dow Jones01-08

0635 GMT - A smartglasses collaboration with Facebook-owner Meta will weigh onEssilorLuxottica's profit margins, according to calculations by analysts at RBC Capital Markets. The Franco-Italian eyecare behemoth has partnered with the tech group on AI-powered Ray-Ban glasses, a tie-up that executives say will power revenue growth as consumers warm to wearable tech. But gross margins for the model are much lower, at around 32%, than the company's current margins at more than 60%, RBC says. The overall margin is therefore likely to fall to around 58% by 2029 as smartglasses make up a greater share of EssilorLuxottica's overall sales, the Canadian bank estimates. "We anticipate higher margin dilution," RBC says, trimming its target price on the stock to 320 euros from 340 euros with an outperform rating. (joshua.kirby@wsj.com; @joshualeokirby)

(END) Dow Jones Newswires

January 08, 2026 01:35 ET (06:35 GMT)

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But gross margins for the model are much lower, at around 32%, than the company's current margins at more than 60%, RBC says. The overall margin is therefore likely to fall to around 58% by 2029 as smartglasses make up a greater share of <a href=\"https://laohu8.com/S/ESLOF\">EssilorLuxottica</a>'s overall sales, the Canadian bank estimates. \"We anticipate higher margin dilution,\" RBC says, trimming its target price on the stock to 320 euros from 340 euros with an outperform rating. 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The Franco-Italian eyecare behemoth has partnered with the tech group on AI-powered Ray-Ban glasses, a tie-up that executives say will power revenue growth as consumers warm to wearable tech. But gross margins for the model are much lower, at around 32%, than the company's current margins at more than 60%, RBC says. The overall margin is therefore likely to fall to around 58% by 2029 as smartglasses make up a greater share of <a href=\"https://laohu8.com/S/ESLOF\">EssilorLuxottica</a>'s overall sales, the Canadian bank estimates. \"We anticipate higher margin dilution,\" RBC says, trimming its target price on the stock to 320 euros from 340 euros with an outperform rating. 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The overall margin is therefore likely to fall to around 58% by 2029 as smartglasses make up a greater share of EssilorLuxottica's overall sales, the Canadian bank estimates. \"We anticipate higher margin dilution,\" RBC says, trimming its target price on the stock to 320 euros from 340 euros with an outperform rating. 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