Zalando (0QXN – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Benjamin Kohnke from Stifel Nicolaus maintained a Buy rating on the stock and has a €40.00 price target.
Benjamin Kohnke has given his Buy rating due to a combination of factors, including Zalando’s expected growth in online market share within the fashion industry. Despite a challenging consumer environment, the company is anticipated to benefit from increased online shopping penetration, which should help offset macroeconomic headwinds. Kohnke is optimistic about Zalando’s ability to improve its shopping experience and marketing strategies, which are expected to drive share gains and revenue growth.
Furthermore, Kohnke is confident in Zalando’s financial health, highlighting a forecasted free cash flow of approximately €400 million, aided by reduced capital expenditures. Although gross margins may face pressure due to a new loyalty program, other cost controls should allow for a slight expansion in adjusted EBIT margins. The acquisition of About You is also expected to contribute positively to future earnings, with potential synergies enhancing profitability in the coming years.
In another report released on March 3, RBC Capital also maintained a Buy rating on the stock with a €50.00 price target.