This recently underperforming stock has an impressive growth story within the luxury sector, according to Bank of America.
Zegna has an impressive growth story within the luxury sector, and recent underperformance in the stock offers an attractive opportunity for investors, according to Bank of America. The firm upgraded the menswear designer's shares to buy from neutral on Monday and increased its price target to $16.50, implying more than 20% upside from its Friday closing price.
Additionally, Zegna's segment profitability is now at 15% EBIT margin, which implies that and further movement will provide upside from its mid-term guidance levels, she added. Wallace also mentioned Zegna's strong brand positioning with high-end customers, which can help the company implement more price increases in the mid- to high-single digit for the next two collections.