Zegna's Turnaround Priced In? Goldman Sachs Moves to Neutral

Goldman Sachs has adjusted its rating on Zegna to 'neutral' from 'buy,' suggesting that the luxury group's recent share price surge adequately reflects its ongoing turnaround. While the broker increased its price target to $14 from $13.30, analysts noted that "the thesis played out." Zegna shares have experienced a substantial rally in 2026, significantly outperforming traditional luxury competitors and broader market indices.

The impressive stock performance is attributed to Zegna's growth, bolstered by its focus on high-end consumers and a strategic pivot. The group has reduced its reliance on the Chinese market, with the United States now representing a larger share of revenue. Furthermore, a significant shift towards direct-to-consumer (DTC) sales has boosted performance, with DTC accounting for 82% of group revenue as of the latest estimate, up from 73% in 2023.

Despite the positive momentum, Goldman Sachs' analysis indicates limited upside potential from current levels, with a discounted cash flow valuation suggesting a 3% downside. Sum-of-the-parts valuations also point to modest upside. The broker's revenue forecasts for 2026 and 2027 remain largely in line with management's comfort levels and market consensus, though 2027 EBIT projections are slightly below company guidance. Zegna's U.S. revenue share has grown substantially, while China's contribution has decreased.