Key Updates
EssilorLuxottica shares fell an additional 2.42% since the September 11 report, declining from $146.55 to the current $143.00. This marks a continuation of the persistent downtrend that has now erased 47.02% of value YTD. The latest catalyst is a Bloomberg report confirming that twenty senior EssilorLuxottica executives publicly defended CEO Francesco Milleri in an internal memo, following the escalating dispute with heir Leonardo Maria Del Vecchio. This represents an unusual and visible show of management solidarity, but also underscores the depth of the governance rift, as the company's leadership felt compelled to issue a public defense rather than resolve the matter privately.
Current Trend
The stock remains in a steep, uninterrupted downtrend across all observed timeframes: -12.38% (1m), -26.57% (6m), -47.02% (YTD). The 1-day move of +1.24% appears to be a minor technical bounce within a broader bearish structure, with the 5-day performance still negative (-0.97%). At $143.00, the stock is trading at fresh lows for the observed period, with no clear technical support established yet given the magnitude and persistence of the decline. Each prior report has recorded a new low, confirming a lower-highs, lower-lows pattern with no signs of trend reversal.
Investment Thesis
The core thesis rests on EssilorLuxottica's global leadership in eyewear (Ray-Ban, Oakley) and optical retail, combined with exposure to the emerging AI smart glasses category as a structural growth driver. However, this thesis is currently overshadowed by an unresolved family governance conflict tied to control of Delfin, the €40 billion Del Vecchio family holding vehicle, which creates management distraction risk at a time when competitive pressure on margins is increasing. The August buyback program (>€800 million) signals management's attempt to defend valuation and confidence, but has thus far failed to stabilize the share price.
Thesis Status
The thesis is deteriorating further. The public defense of the CEO by twenty senior executives is a new and notable escalation—rather than resolving the conflict, it signals that the dispute has moved from a family/boardroom issue to one requiring visible management intervention, which increases reputational and governance risk. The buyback has not arrested the decline, and the stock has continued to set new lows in three consecutive reporting periods. The AI smart glasses opportunity, cited as a potential growth driver, remains unquantified and is not yet offsetting the negative sentiment from the leadership crisis.
Key Drivers
The dominant driver remains the unresolved family governance conflict. Senior executives' public defense of CEO Milleri (Bloomberg, Sep 11) follows the heir's resignation and criticism of operational direction (Bloomberg, Aug 25) and the broader €40 billion estate dispute over Delfin control (Bloomberg, Aug 30). Management's response—an €800 million+ buyback (Bloomberg, Aug 28)—has not yet stemmed the sell-off, indicating the market remains focused on governance risk over capital return actions.
Technical Analysis
The stock is trading at $143.00, a fresh low for the observed period, following a 12.38% decline over the past month. The +1.24% 1-day move suggests a short-term technical bounce, but the 5-day return remains negative, indicating the bounce has not established a durable reversal. No clear support level has held over the past three reporting cycles, as each has recorded a new low; resistance is likely to emerge near the prior report's price levels ($146.55) and the mid-September level of $149.85. The absence of a stabilizing base points to continued elevated volatility and downside risk until governance clarity emerges.
Bull Case
- Management has demonstrated unified support for the CEO, with twenty senior executives publicly backing Milleri, potentially signaling operational continuity despite the family dispute (Bloomberg, Sep 11).
- The €800 million+ buyback program reflects management's confidence in intrinsic value and commitment to shareholder returns amid the price decline (Bloomberg, Aug 28).
- The company retains strategic positioning in the emerging AI smart glasses market, a potential long-term growth category cited alongside the governance discussion (Bloomberg, Aug 30).
- The heir's resignation removes an internal source of public criticism of operational direction, potentially reducing near-term boardroom friction (Bloomberg, Aug 25).
- The 1-day price uptick (+1.24%) suggests some buying interest emerging near current levels, potentially reflecting oversold conditions after the sharp YTD decline.
Bear Case
- The unresolved €40 billion family estate dispute over Delfin control continues to create governance uncertainty and management distraction at a critical competitive juncture (Bloomberg, Aug 30).
- The need for twenty senior executives to publicly defend the CEO signals an escalating, rather than resolving, internal conflict, raising reputational and stability concerns (Bloomberg, Sep 11).
- The stock has declined 47.02% YTD and has set new lows across three consecutive reporting periods, with no technical support established.
- The €800 million buyback has failed to stabilize the share price, suggesting the market is prioritizing governance risk over capital return signals (Bloomberg, Aug 28).
- This marks the second heir departure in the period, indicating a pattern of recurring family/leadership instability rather than an isolated event (Bloomberg, Aug 25).