Shares in French-Italian eyewear giant EssilorLuxottica jumped more than 5% to €251.70 on Tuesday after reports emerged that Meta Platforms had acquired a nearly 3% stake in the company, worth approximately €3 billion ($3.5 billion).
If gains hold, it would mark EssilorLuxottica’s best trading day since mid-February.
According to sources cited by Bloomberg and Reuters, Meta is considering further investments that could raise its stake to around 5% over time.
The move reinforces Meta’s long-term commitment to the AI-powered wearables space and highlights the strength of its existing collaboration with the Ray-Ban parent, particularly in the development of smart glasses.
Analysts back the move, citing high growth, but warn of increased competition
Meta and EssilorLuxottica began working together in 2023 with the launch of Ray-Ban Meta smart glasses, which have seen strong consumer uptake.
The social media company recently expanded its wearables portfolio by teaming up with Oakley to debut the Oakley Meta HSTN—a new line of AI-enhanced glasses featuring open-ear audio, high-resolution cameras, water resistance, and Meta AI integration.
Meta Platform’s reported minority-stake investment in EssilorLuxottica should be read as a vote of confidence in the Ray-Ban maker, Bernstein analysts said.
It also supports Meta’s interest in the smart-glasses sector, a sector toward which Apple has pivoted recently, they said.
“We have no doubt that the smart-glasses opportunity will be large, and EssilorLuxottica will likely benefit given its production and manufacturing prowess,” the analysts wrote in a research note.
However, smart glasses may one day be sold in place of traditional glasses, which would impact the French company’s core business, they say.
Analyst views on earnings
With second-quarter earnings around the corner, analysts expect EssilorLuxottica to post solid growth across all major markets.
UBS forecasts sales of €7.24 billion for Q2, a 7% year-on-year increase at constant currency.
While North America—the company’s largest market—is projected to grow 4.1%, gains in Europe, Asia, and Latin America are expected to reach double digits.
CEO Francesco Milleri previously stated that EssilorLuxottica plans to ramp up smart glasses production and deepen partnerships with Meta and other brands.
The company’s ability to scale such efforts could prove crucial in maintaining its competitive edge, especially as global tech firms accelerate their push into wearable devices.
Still, the path forward is not without hurdles.
Morgan Stanley recently trimmed its price target for EssilorLuxottica from €290 to €280, citing reduced expectations for earnings and profit growth between 2025 and 2027.
The research firm, however, maintained its overweight rating, citing the company’s unmatched vertical integration and global market leadership as key long-term strengths.
Short-term boost, long-term opportunity
The smart glasses market is rapidly evolving, with Apple, Meta, and other tech giants placing increasing bets on AI-enabled wearables.
While broader adoption remains several years away, Meta’s investment signals confidence in the sector’s trajectory and in EssilorLuxottica’s position at its forefront.
Ahead of its upcoming results, EssilorLuxottica is forecast to report first-half adjusted net income of €1.84 billion and revenue of €14.07 billion—slightly below consensus estimates.
Investor attention will likely focus on future growth commentary, particularly surrounding the momentum of smart glasses and the potential implications of further strategic investments by Meta.
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