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Investing.com - Jefferies has assumed coverage on Zalando SE (ETR:ZALG) (ZAL:GR) (OTC:ZLNDY) with a buy rating and a price target of EUR33.00.
The research firm views Zalando as a "top-class operator in European online clothing retail" according to its analysis released Sunday.
Jefferies believes that while the market understands Zalando’s sales momentum, it fails to adequately account for potential margin expansion through increasing fulfillment capacity utilization and profitable merger and acquisition-led growth in the longer term.
The firm projects a 25% earnings per share compound annual growth rate for Zalando between 2024 and 2028, with operating profit forecasts running 3% to 7% above consensus estimates.
Jefferies considers the current valuation "undemanding" at 21.3 times the projected 2026 price-to-earnings ratio.
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