By 11:00 a.m., the stock had climbed 4.48% to €186.75, while the CAC 40 advanced 2.1% and the STOXX European luxury sector index recovered 4%.

In a note released this morning, Oddo BHF noted that the stock has declined nearly 35% this year. This retreat has been fueled by a weaker margin outlook due to an unfavorable product mix in eyewear, the risk of intensifying competition from tech giants in smart glasses, and a comparison base set to become very challenging in the second half of the year.

"This loss of confidence appears excessive to us and overplays the disruptive impact of AI glasses," the brokerage firm emphasized.

In this context, the intermediary considers the recent share price decline "highly exaggerated" and finds the stock "manifestly undervalued at this stage."

From its perspective, the current price nearly reflects a highly pessimistic scenario of 5% annual growth over 10 years with EBIT margins remaining at 2025 levels.

According to Oddo, such a scenario accounts for the negative effects of the rise of AI glasses, such as margin dilution and a higher beta, without incorporating the positive effects, namely sales growth. It also ignores growth drivers outside of the AI eyewear segment, the broker noted.

Adjusted Forecasts but Upside Potential Remains Intact

Anticipating weaker organic growth than previously expected, analysts have modestly adjusted their EBIT forecasts for 2026 by -1%, with more significant adjustments to their 2027 and 2028 estimates.

"Based on these now more realistic forecasts, we believe the stock is capable of gradually regaining investor favor," the firm added.

The broker maintains its "outperform" rating on the stock but has reduced its price target from €251 to €220. This revised target still implies a 12-month upside potential of more than 20%.

Elsewhere in the sector, LVMH rose 5.1%, Hermes gained 5.3%, and Kering climbed 6.5%, supported by bargain hunting following the correction seen in recent months.

Since January 1, the STOXX Europe Luxury 10 index has dropped 11.2%, while the benchmark STOXX Europe 600 index has appreciated by 6%.