This Italian fashion brand has room to run even as luxury landscape remains shaky, TD Cowen says
Italian fashion brand Ermenegildo Zegna is building a loyal customer base through its highly customizable high-end apparel, allowing its shares to continue to grow even as demand for luxury goods remains muted, according to TD Cowen. The firm upgraded the luxury clothing name to buy from hold. It also hiked its price target on shares to $15 from $13, implying 20% upside from Tuesday’s close. “We see fundamentals improving, supported by Zegna’s durable, vertically integrated core and a clearer path to stabilization at Tom Ford and Thom Browne,” analyst Oliver Chen said Wednesday in a note to clients. “Zegna brand has proved durable even through periods where luxury has been more challenged, supported by personalization, suiting capabilities, and clienteling in loyal men’s market.” The Italian menswear maker, which has a long-term license to oversee the Tom Ford business, has seen its shares rise 46% over the past year. This comes even as luxury brands continue to contend with geopolitical and macroeconomic factors that have weighed on consumer spending. ZGN 1Y mountain The stock has risen 46% over the past 12 months. The personal luxury goods industry is on track to grow 2.5% in 2026, lower than previously expected, a recent report from Morgan Stanley Research shows. But roader trends in luxury are unlikely to dampen the Italian menswear maker’s growth, particularly as a divide between wealthy and less affluent consumers’ spending patterns deepens in the U.S., according to TD Cowen. “We view ZGN as a beneficiary of the K-shaped consumer, supported by a sticky, ultra-premium and relationship-driven client base,” Chen wrote. “Zegna Core Competencies [are its] best-in-class clienteling and long-standing customer relationships…authority in tailoring and adjacent categories… [and] vertically integrated model supporting brand equity and margin durability.” TD Cowen’s call falls in line with consensus on the Street. Of the 12 analysts covering Zegna, 8 have a buy or strong buy on the stock, LSEG data shows.
