In a report released today, Daria Nasledysheva from Bank of America Securities reiterated a Buy rating on Ermenegildo Zegna, with a price target of $10.00.
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Daria Nasledysheva’s rating is based on the strong performance of Ermenegildo Zegna’s core segment, which has significantly contributed to the group’s profitability. The Zegna segment reported an adjusted EBIT that exceeded expectations by 22%, with an expansion in EBIT margin supported by improved direct-to-consumer sales and operating leverage. Despite challenges in other segments like Thom Browne and Tom Ford, the overall group is expected to achieve an adjusted EBIT of €166 million for the full year, driven by reduced pressure from smaller brands and continued investment in brand-building activities.
Additionally, the analyst has adjusted the price objective to $10, reflecting a lower discount due to the company’s continued execution in a challenging market. The expectation of organic revenue growth in the third quarter, particularly in regions like Greater China, the Americas, and EMEA, further supports the positive outlook. The company’s ability to navigate sector dynamics and maintain momentum, despite a tough comparison base, underpins the Buy rating.
In another report released on September 17, Oddo BHF also initiated coverage with a Buy rating on the stock with a $11.50 price target.