Why a buy recommendation from Metzler does not support the recovery attempt of Zalando shares

Why a buy recommendation from Metzler does not support the recovery attempt of Zalando shares

According to a report by www.finanzen.net, Bankhaus Metzler issued a buy recommendation for Zalando shares, but this did not lead to an attempt at recovery. The shares of the online fashion retailer temporarily lost 0.65 percent and were quoted at 19.22 euros. Metzler analyst Felix Jonathan Dennl sees scope for a price target of 26 euros in the medium term and therefore rates the shares as “buy”. Nevertheless, good business figures from the fashion group Urban Outfitters on Tuesday had a positive impact on Zalando shares.

In the stock market year 2024, Zalando's share price loss will be almost ten percent, apart from the expected recovery on Tuesday, which means it will be in last place in the DAX. In 2023, the papers were at the bottom of the leading German index with an annual decline of a good 35 percent; In 2022 they were second to last with a loss of more than half. The record of almost 106 euros from mid-2021 is a long way away. Back then, in the middle of the corona pandemic, online trading was booming.

The negative developments in Zalando's share price can be attributed to various factors. On the one hand, investors are concerned about the business development of the DAX group, especially in the dreary economic environment. Furthermore, a profit warning from the British sports and leisure fashion retailer JD Sports Fashion further dampened the industry mood. Increased freight rates due to problems in the Red Sea and passage through the Suez Canal are also impacting European fashion retailers, including Zalando. Despite these burdens, analyst Richard Chamberlain from the Canadian bank RBC remains optimistic and maintains his price target of 44 euros with an “outperform” rating for Zalando.

The ongoing negative development of Zalando shares can therefore be explained by external factors and industry developments. It remains to be seen how further market conditions will affect the company.