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Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at EssilorLuxottica Société anonyme's (EPA:EL) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Did EL's recent earnings growth beat the long-term trend and the industry?
EL's trailing twelve-month earnings (from 31 December 2018) of €1.1b has increased by 4.5% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.1%, indicating the rate at which EL is growing has accelerated. How has it been able to do this? Let's see if it is solely attributable to an industry uplift, or if EssilorLuxottica Société anonyme has experienced some company-specific growth.
In terms of returns from investment, EssilorLuxottica Société anonyme has fallen short of achieving a 20% return on equity (ROE), recording 3.5% instead. Furthermore, its return on assets (ROA) of 2.5% is below the FR Luxury industry of 5.7%, indicating EssilorLuxottica Société anonyme's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for EssilorLuxottica Société anonyme’s debt level, has declined over the past 3 years from 13% to 4.3%.
What does this mean?
EssilorLuxottica Société anonyme's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as EssilorLuxottica Société anonyme gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research EssilorLuxottica Société anonyme to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for EL’s future growth? Take a look at our free research report of analyst consensus for EL’s outlook.
- Financial Health: Are EL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.