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Investing.com - Goldman Sachs lowered its price target on Zalando SE (ETR:ZALG) (ETR:ZAL) to EUR43.00 from EUR47.00 on Thursday, while maintaining a Conviction Buy rating on the German online fashion retailer. InvestingPro data suggests the stock is currently undervalued, with strong fundamentals including a healthy balance sheet and positive earnings yield of 5%.
The price target adjustment follows Zalando’s second-quarter 2025 results, which showed revenue growth of 7.3%, driven by ZMS (+40%) and B2B (+12%) segments, alongside a flat EBIT margin that included the reversal of a historic customs charge. The company maintains solid financial health with a current ratio of 1.36x and an impressive Altman Z-Score of 5.84.
Zalando has updated its full-year 2025 GMV/revenue growth guidance to +4-7% from the previous +4-9%, and raised its EBIT guidance to incorporate its ABOUT YOU acquisition.
Goldman Sachs noted that despite investor concerns about near-term guidance delivery, particularly given more demanding third-quarter comparatives, the company reported a good start to the third quarter of 2025.
The investment bank remains optimistic about Zalando’s prospects, citing an ongoing inflection in the European online channel and future synergies from the ABOUT YOU deal that will benefit earnings in later years.
In other recent news, Morgan Stanley (NYSE:MS) has adjusted its outlook on Zalando SE, a European e-commerce company. The investment bank has lowered its price target for Zalando to EUR25.50 from a previous target of EUR28.50. Despite this adjustment, Morgan Stanley continues to maintain an Underweight rating on the company. The revision comes amid concerns regarding the increasing influence of social commerce on traditional apparel marketplaces. Specifically, Morgan Stanley pointed out the potential impact of TikTok Shop’s expansion into Europe, which could pose a threat to Zalando’s market position. These developments highlight the evolving landscape in the e-commerce sector and the challenges faced by established players like Zalando.
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