Zalando shares were the second-biggest gainer on the DAX index on the Frankfurt Stock Exchange on Friday, following positive comments from Morgan Stanley, which raised its recommendation on the online ready-to-wear group from 'online weighted' to 'overweight'.

The stock is currently up 4.3%, just behind Porsche (+5%), which is benefiting from the good results published the previous day by Ferrari and this morning by Mercedes-Benz.

In a study devoted to the retail sector, Morgan Stanley says it sees a buying opportunity in the stock, which has lost more than 50% of its value over the last 12 months despite rather resilient results.

Even if demand remains sluggish, Zalando has sufficient levers to preserve its margins, while the market is expecting a fall of around 40% in its results this year", he argues, while maintaining his price target of 26 euros.

Knowing that the stock is now trading at a 20% discount to Inditex, analysts say they perceive a favorable risk/return profile.

Another supportive factor is that this morning, RBC's teams renewed their 'outperform' opinion on the share, which they continue to consider their 'favorite stock' within the online retail sector due to the German group's solid competitive positioning.

Copyright (c) 2024 All rights reserved.