Goldman Sachs Issues Buy Recommendation for Zalando Stock

Investment Bank Raises Target Price to €52

Strong Prospects for Online Fashion Retailer

New York, September 15, 2023 - Leading investment bank Goldman Sachs has issued a "buy" recommendation for shares of Zalando SE (ZAL.DE), Europe's largest online fashion retailer.

In a research note to clients, Goldman Sachs analysts cited Zalando's strong financial performance, including a 15% increase in gross merchandise value (GMV) during the first half of 2023. The analysts also highlighted Zalando's expanding geographic reach and growing customer base.

Goldman Sachs raised its 12-month target price for Zalando shares from €45 to €52, implying a potential upside of over 15% from current levels.

Continued Growth in Online Fashion Market

According to a report published by McKinsey & Company, the global online fashion market is expected to reach $1 trillion by 2025, driven by the increasing adoption of e-commerce and the growing popularity of fashion-focused social media platforms.

Goldman Sachs believes that Zalando is well-positioned to capitalize on this growth, given its strong brand recognition, extensive product offering, and efficient logistics network.

Expansion into New Markets

Zalando has been actively expanding into new markets in recent years, including the United States and Canada. The company plans to continue its global expansion, with a particular focus on emerging markets in Asia and South America.

Goldman Sachs analysts believe that Zalando's international expansion will drive significant revenue growth and improve the company's overall profitability.

Strong Financial Position

Zalando has a strong financial position, with a healthy cash balance and positive operating cash flow. The company has also been consistently profitable in recent years.

Goldman Sachs believes that Zalando's strong financial position will enable it to invest in new growth initiatives and weather any potential economic headwinds.

Conclusion

Goldman Sachs' "buy" recommendation for Zalando shares reflects the investment bank's confidence in the company's long-term growth prospects. Zalando's strong financial performance, expanding geographic reach, and strong financial position make it an attractive investment for both long-term and short-term investors.