Analyst Oliver Chen of TD Cowen reiterated a Hold rating on Ermenegildo Zegna, retaining the price target of $8.00.
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Oliver Chen has given his Hold rating due to a combination of factors impacting Ermenegildo Zegna’s performance. The company is currently navigating a challenging environment in key markets like China and the US, where consumer confidence remains volatile. This uncertainty, coupled with the company’s strategic efforts to rationalize its wholesale channels, particularly for Thom Browne, has led to moderated sales estimates for the year.
Furthermore, while Zegna’s investments in integrating and scaling its brand portfolio, including the recent acquisition of Tom Ford, are promising, they also present short-term challenges. The company’s strengths, such as its heritage in craftsmanship and vertical integration, provide competitive advantages. However, the lack of significant upside in major markets and ongoing wholesale channel adjustments contribute to the cautious outlook. As a result, Oliver Chen maintains a Hold rating, monitoring upcoming catalysts like new fashion shows and product launches.
Chen covers the Consumer Cyclical sector, focusing on stocks such as e.l.f. Beauty, Capri Holdings, and Ulta Beauty. According to TipRanks, Chen has an average return of 5.8% and a 51.81% success rate on recommended stocks.