TD Cowen analyst Oliver Chen maintained a Hold rating on Ermenegildo Zegna today and set a price target of $10.00.
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Oliver Chen has given his Hold rating due to a combination of factors influencing Ermenegildo Zegna’s performance. The company has shown mixed results, with the Zegna brand outperforming market expectations, while Tom Ford’s performance was in line and Thom Browne lagged behind. Despite some positive trends, overall growth was slightly below market expectations, and there are concerns about the ongoing volatility in the Chinese market, although negative growth there is slowing down.
Chen maintains a cautious outlook, setting a price target of $10 based on a 20x forward P/E ratio, which aligns with the company’s three-year average. The decision to hold is also influenced by the ongoing turnaround efforts at Thom Browne and the transformation of the wholesale channel, expected to be completed by 2026. Additionally, projections for the fourth quarter indicate modest growth for Zegna, flat performance for Thom Browne, and a slight decline for Tom Ford, with anticipated free cash flow and net debt figures for the coming years providing further context for the Hold rating.
In another report released on October 14, TR | OpenAI – 4o also downgraded the stock to a Hold with a $9.50 price target.