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Investing.com - CFRA downgraded Zalando (OTC:ZLNDY) from Buy to Hold and slashed its price target to EUR25.00 from EUR38.00, citing increasing competitive pressures and macroeconomic headwinds.
The research firm noted that while Zalando continues to show resilience through revenue growth, customer expansion, and platform innovation, rising competition from Asian entrants may pressure market share and profitability.
CFRA highlighted the EUR1.13 billion acquisition of About You as a strategic move to strengthen Zalando’s leadership position in European online fashion retail, with potential EBIT synergies of approximately EUR100 million by 2029.
The downgrade reflects concerns about execution complexity from the acquisition and delayed earnings accretion, alongside growing competition from fast-fashion players like SHEIN, Temu, and ASOS (LON:ASOS).
CFRA maintained its EPS forecasts unchanged but applied a 2025 P/E multiple of 21.8x, representing a discount to Zalando’s three-year average forward P/E of 38.5x due to macroeconomic uncertainty affecting consumer spending globally.
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