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Investing.com -- Shares of EssilorLuxottica SA (EPA:ESLX) fell more than 3% on Tuesday, underperforming a broadly firmer European market, after Goldman Sachs downgraded the Ray-Ban maker to Neutral from Buy, warning that growth from its AI glasses business is likely to slow over the coming years.
EssilorLuxottica shares dropped 3.3% to €163.75, compared with a 0.7% decline in the STOXX 600.
Goldman cut its 12-month price target to €200 from €230, arguing that investor expectations have become too optimistic as comparisons become tougher and competition intensifies. The brokerage lowered its long-term constant-currency revenue growth forecast to an average of 7.9% for 2026-2028, down from 8.9% previously and below the market consensus of 9.5%.
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The brokerage said AI glasses have been the biggest driver of EssilorLuxottica's recent growth, but expects that momentum to moderate as blockbuster launches become harder to repeat. It also warned that upcoming smart-glasses launches from Google, Samsung and Apple could increase competitive pressure over the next 18 months.
Goldman also highlighted the recent launch of lower-priced Meta smart glasses, saying they could reshape EssilorLuxottica's role in the AI glasses value chain by shifting more of its business toward supplying lenses and distribution rather than manufacturing frames. While that could ultimately support margins, the transition may weigh on reported revenue growth.
The broker nevertheless maintained that demand for AI eyewear remains healthy and expects the category to continue expanding. Its downgrade reflects expectations for slower growth rather than a deterioration in the company's long-term position, with Goldman saying investors may need to temper expectations after the rapid acceleration seen over the past year.
