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Investing.com - Macquarie downgraded ZOZO, Inc (3092:JP) (OTC:SRTTY) from Neutral to Underperform on Thursday, while reducing its price target to JPY1,180.00 from JPY1,586.51.
The downgrade reflects concerns that ZOZO’s acquisition of LYST will negatively impact the company’s profitability in the coming years, according to Macquarie’s analysis.
The investment firm projects that ZOZO’s operating profit margin will decline to 28% over the next three years, down from an expected 30% in fiscal year 2025.
For the first quarter of fiscal year 2026, Macquarie estimates operating profit will fall by 7.3% year-over-year, compared to consensus expectations of a 0.1% decline, primarily due to acquisition-related costs.
Macquarie also announced that analyst coverage of ZOZO has transferred from Ellie Jiang to Hangil Moon.
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