Deutsche Bank ups Zalando shares target, expects solid Q2 performance By Investing.com

On Monday, Deutsche Bank showed confidence in Zalando SE (ZAL:GR) (OTC: ZLNDY) shares, as its analyst increased the company’s price target to €34.00, up from the previous €32.00, while maintaining a Buy rating on the stock.

The adjustment comes ahead of Zalando’s second-quarter earnings report, scheduled for August 6, with expectations of continued sales growth and earnings before interest and taxes (EBIT) improvement from the first quarter.

The analyst noted that despite a 10% decline in Zalando’s share price during June, due to concerns over potential negative impacts of weather conditions, the fears might be unfounded. The rationale behind the maintained optimism includes Zalando’s strategic initiatives and the advantage of having less direct competition with physical store-based retailers.

Zalando, an online fashion and lifestyle retailer, is anticipated to demonstrate a solid performance in its upcoming earnings release. The forecast for the second quarter includes a revenue growth of 4%, gross merchandise volume (GMV) increasing by 3%, and an adjusted EBIT of €170 million, which would represent a 17% year-over-year increase.

This price target revision reflects Deutsche Bank’s belief in Zalando’s resilience and potential for growth despite the challenging retail environment evidenced by weak industry data and recent reports from competitors like H&M (ST:). The bank’s analysis suggests that Zalando’s proactive measures and favorable comparisons to traditional retailers will likely bolster its financial results.

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