Goldman Sachs has moved Zegna from a Buy to a Neutral recommendation, concluding that recent share appreciation has already captured much of the improvement in the group's performance. At the same time the bank nudged up its price target to $14 from $13.30.
The broker noted Zegna’s notable share-price strength in 2026 and over the last year. Zegna’s stock has risen 39% so far in 2026 and is up 60.3% over the past 12 months, figures Goldman Sachs said represent an outperformance of 57 percentage points versus traditional luxury peers and 44 percentage points versus the STOXX600.
"Thesis played out - Move Zegna to Neutral," the analysts wrote, adding that "with the core elements of our thesis increasingly reflected in the valuation, we see a more balanced risk-reward at current levels."
Goldman Sachs attributed the rally to several operational and market shifts: growth in the Zegna brand among high-end consumers, a reduced dependence on China driven by market-share gains in the United States, and an expanding direct-to-consumer footprint. The bank noted direct-to-consumer sales now represent 82% of group revenue, up from 73% in 2023.
On valuation, Goldman Sachs’ discounted cash flow model - built using a 9.5% weighted average cost of capital and a 3.0% terminal growth rate - indicates roughly a 3% downside from current market levels.
In a sum-of-the-parts appraisal that assumes Thom Browne and Tom Ford Fashion can ramp up profitability immediately, the bank estimated a 16% upside in its base case. That calculation produced a group enterprise value estimate of 23;3.89 billion, compared with a market-implied enterprise value of 23;3.36 billion.
Goldman Sachs’ forecast for 2026 revenue edged up by less than 1% to 23;2.00 billion, and adjusted EBIT was projected at 23;187 million - a figure broadly in line with the 23;185 million-23;190 million range management said it was comfortable with and consistent with Visible Alpha consensus, according to the bank.
For 2027 the broker estimated adjusted EBIT of 23;239 million, which sits below the companys guidance range of 23;250 million-23;300 million.
Goldman Sachs highlighted geographic shifts within Zegnas revenue mix. U.S. revenue share rose to about 30% in 2025 from roughly 20% in 2022, while Chinas contribution declined to about 23% from 33% over the same interval. The bank also reported that the groups share of retail revenue climbed to 84% from 33% between 2022 and its 2026 estimate, and that Chinas share of group revenue fell to 23% from 91% in that span.
On earnings per share, Goldman Sachs forecast 23;0.36 for 2026, down from 23;0.38 in 2025, before projecting increases to 23;0.51 in 2027 and 23;0.61 in 2028.
The bank noted the stock is trading at 34.4 times projected 2026 earnings, versus a sector average of 26 times when excluding Hermes and Brunello Cucinelli.
Goldman Sachs identified primary risks to its view: the speed and effectiveness of execution at Thom Browne and Tom Ford Fashion, the durability of demand among high-end consumers, and the challenges associated with integrating the Tom Ford Fashion license.
Summary
Goldman Sachs downgraded Zegna to Neutral after substantial share gains. Although the bank increased its price target to $14, its valuation models point to limited downside or modest upside depending on assumptions about the profitability ramp at acquired/partner brands. The firm highlighted geographical shifts toward the U.S. and a growing direct-to-consumer mix, while flagging execution and premium-demand risks.
Key points
- Zegna shares have climbed 39% year-to-date in 2026 and 60.3% over the past 12 months, outperforming peers and the STOXX600.
- Direct-to-consumer sales now account for 82% of group revenue, up from 73% in 2023; the U.S. share of revenue rose to about 30% in 2025 from 20% in 2022.
- Valuation work shows a small downside under DCF assumptions and limited upside under a sum-of-the-parts base case that assumes rapid profitability at Thom Browne and Tom Ford Fashion.
Risks and uncertainties
- Pace of execution at Thom Browne and Tom Ford Fashion - affects group profitability and valuations across luxury and fashion sectors.
- Demand from high-end consumers - a key driver for luxury goods and retail revenue projections.
- Integration of the Tom Ford Fashion license - operational and strategic risk for the fashion business and investor expectations.