Stifel maintains its 'buy' rating on Zalando shares, with a price target reduced from €37 to €35, due to slightly lower earnings forecasts.

The revised sales growth forecast of 3.9% suggests a marked acceleration compared to fiscal year 2023, the analyst says.

Stifel reports that Zalando has presented 'a viable strategy' to return to high-single-digit growth from 2025, subject to continued improvements in macroeconomic conditions.

Profitability should also improve, thanks in particular to better gross margins in the retail business.

Thus, the adjusted EBIT margin of ~7% by 2028 looks achievable, says the broker, who believes that with gross cash of €2.3 billion, Zalando has substantial financial flexibility.


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