Ermenegildo Zegna, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Daria Nasledysheva from Bank of America Securities reiterated a Buy rating on the stock and has a $10.00 price target.
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Daria Nasledysheva’s rating is based on a combination of factors, primarily focusing on the projected growth in Ermenegildo Zegna’s direct-to-consumer (DTC) segment. Despite challenges in the wholesale sector, which is expected to see a significant decline, the DTC segment is forecasted to grow by 8%, consistent with previous quarters. This growth is driven by strong performance in key retail areas, which offsets the negative impact from wholesale.
Furthermore, the Buy rating is supported by the potential upside in the stock price, with a price objective of $10, suggesting a 13% increase from the current price. The stock’s valuation, with a 19x price-to-earnings ratio and a projected 19% three-year EPS compound annual growth rate, also underpins the positive outlook. Adjustments in earnings per share estimates for the coming years, considering foreign exchange and financial charges, further reinforce the confidence in Zegna’s financial trajectory.
In another report released on October 9, Deutsche Bank also maintained a Buy rating on the stock with a $12.00 price target.