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.
Daria Nasledysheva’s rating is based on a combination of factors that highlight Ermenegildo Zegna’s potential for growth. The company reported first-quarter sales that were in line with expectations, with a notable increase in direct-to-consumer (DTC) revenues driven by product innovation, such as the launch of the new Mocassin shoe. Despite a slight deceleration in growth from the previous quarter, Zegna’s focus on cost optimization and its ambition for low-single-digit revenue and EBIT growth in 2025 are positive indicators.
Furthermore, Zegna’s valuation appears attractive, trading at a lower multiple compared to its luxury peers, which positions it as one of the more affordable options in the sector. While the luxury market has generally slowed, Zegna has shown resilience with strong performance in developed markets and signs of improvement in Mainland China. These factors, combined with the expectation of wholesale rationalization concluding in 2025, support the Buy rating given by Daria Nasledysheva.
In another report released today, Goldman Sachs also maintained a Buy rating on the stock with a $10.60 price target.