Essilor upside is visible with rose-tinted glasses

EssilorLuxottica SA

12/02/2026 12:19

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Jennifer Johnson

LONDON, Feb 12 (Reuters Breakingviews) - The iPhone put the internet in our pockets. Now, Big Tech is on the hunt for a device that can weave artificial intelligence into the fabric of daily life. Facebook owner Meta Platforms META.O has thrown its weight behind smart glasses, partnering with Ray-Ban owner EssilorLuxottica ESLX.PA to realise its vision. The duo’s eyewear collaborations have flown off the shelves in recent months, and the Franco-Italian group now trades at a higher multiple than many luxury stocks. Justifying that rating will mean proving that smart glasses can be an enduring profit engine, not just a passing fad.

EssilorLuxottica, which reported results late on Wednesday, sold more than 7 million pairs of AI glasses last year. The sales account for around 6% of group revenues, per Citigroup analysts' calculations. It's a major uptick on the estimated 1% sales contribution the products made in the prior year. Analysts don’t detect any hint of slowing momentum. By 2034, RBC reckons smart spectacles will bring in over 20 billion euros in revenue, with some 66 million units sold. In this scenario, smart glasses will come to account for around one-third of EssilorLuxottica’s top line.

On current trends, it looks perfectly plausible. AI specs could in theory become a widely popular wearable, like smartwatches are today. That may be why investors value EssilorLuxottica at 35 times 2026 earnings, based on analyst forecasts gathered by LSEG. That’s significantly higher than luxury sector mainstay LVMH LVMH.PA at 22 times, and roughly double eye-care specialist Alcon’s ALCC.S multiple of 18.

Still, the trajectory of smart glasses also depends on what the competition brings to market. OpenAI is currently working on a top-secret bit of kit, which may be based on audio rather than visual input, with former Apple AAPL.O designer Jony Ive. Alphabet GOOGL.O is preparing to release its own smart glasses. If either has superior features and functionality, Meta and its partner could lose ground in the market.

There are also questions about the profit margins on the Meta glasses, given EssilorLuxottica has to source third-party electronic components to make them. Its normal range of lenses and frames, by contrast, are part of a vertically integrated supply chain. The upshot is that investors are making a double bet by rating EssilorLuxottica so highly: first, that smart specs will soar; second, that the margins will prove to be respectable. Either of those could turn out to be wrong.

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CONTEXT NEWS

Franco-Italian eyewear group EssilorLuxottica on February 11 said that its revenue grew more than 11% year-on-year in 2025 to 28.5 billion euros. The acceleration was particularly pronounced in the fourth quarter, with sales up over 18% year-on-year.

Management said performance had been boosted by the “sharp acceleration of the AI-glasses business” in partnership with Meta Platforms.

The companies originally teamed up in 2019, and in September 2024 announced an extension of their partnership into the next decade to develop "multi-generational smart eyewear products”.

The results, reported after market close on February 11, sent shares up 4% to nearly 261 euros as of 1120 GMT on February 12.

EssilorLuxottica trades like a luxury stock, not an eyecare company https://www.reuters.com/graphics/BRV-BRV/lgvdqrwjxpo/chart.png

(Editing by Liam Proud; Production by Shrabani Chakraborty)

((For previous columns by the author, Reuters customers can click on JOHNSON/Jennifer.Johnson@thomsonreuters.com))