BofA Securities Downgrades Ermenegildo Zegna Group (ZGN) to Neutral

BofA Securities analyst Daria Nasledysheva downgraded Ermenegildo Zegna Group (NYSE: ZGN) from Buy to Neutral with a price target of $11.20 (from $11.50).

The analyst comments: "Zegna is a successful brand turnaround story, in our view, repositioning from a lagging formalwear business into one of the key luxury men’s leisurewear players (see our initiation). The company delivered faster retail revenue growth than most peers. However, the next leg of the Zegna Group equity story hinges on two pillars: (1) addressing the LFL growth trajectory of two smaller brands Thom Browne & Tom Ford, and (2) expanding EBIT margins through improving sales densities, amid the succession and leadership transition at the Group. We trim our 2026-27E EBIT by 3-7% and are now 8-9% below consensus. Following a 34% re-rating in 2025, the stock now trades at 25x 2026E P/E. We think like most of the sector, the stock needs revenue beats and EPS upgrades to continue to outperform from here (see our year ahead report: Hold your horses), and this is not our base case."

For an analyst ratings summary and ratings history on Ermenegildo Zegna Group click here. For more ratings news on Ermenegildo Zegna Group click here.

Shares of Ermenegildo Zegna Group closed at $11.02 yesterday.

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