Analyst Daria Nasledysheva of Bank of America Securities reiterated a Buy rating on Ermenegildo Zegna (ZGN – Research Report), retaining the price target of $9.50.
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Daria Nasledysheva’s rating is based on several factors that highlight Ermenegildo Zegna’s potential for growth despite some challenges in the wholesale segment. The company is expected to experience faster revenue growth in the second quarter compared to the first, driven by its strong direct-to-consumer (DTC) performance. This growth is attributed to Zegna’s higher exposure to affluent local clientele, robust sales in the US, and the successful introduction of new products and collections that have already shown positive results.
Despite a challenging wholesale environment, where reductions are anticipated, the retail trends at Thom Browne and Tom Ford are expected to remain stable. While the luxury sector as a whole faces a slowdown due to decreased tourism spending and other factors, Zegna’s valuation remains attractive. At a projected 17x 2026E P/E, the stock is considered reasonably priced given its resilience, prompting the reiteration of a Buy rating.
According to TipRanks, Nasledysheva is a 2-star analyst with an average return of -0.4% and a 50.00% success rate.
In another report released on June 26, Goldman Sachs also maintained a Buy rating on the stock with a €10.60 price target.