ZGN Stock Forecast & Price Target

Ermenegildo Zegna is supported by a durable core brand that delivered 1H organic revenue growth of +9.3%, with core Zegna up +13.9% and DTC momentum of +15.8%, while group Adj. EBIT margin held at 7.5% and gross margin stayed stable despite FX headwinds. The outlook is further strengthened by management’s reaffirmed FY26 expectations and FY27 framework of roughly €2.2-2.4bn in revenue and €250-300mm in Adj. EBIT, which suggest intact earnings power as operating leverage and a richer DTC mix support margin expansion. China’s acceleration to +8.6% organic in 2Q and continued market share gains add confidence, while Tom Ford’s improving traction and Thom Browne’s near-breakeven FY26 target provide additional upside as portfolio drag gradually eases.

Ermenegildo Zegna is facing a negative setup because its luxury demand remains exposed to a weak macro backdrop, currency pressure, and softer consumer spending, all of which can compress sales and margins. Wholesale declines are a major drag, with wholesale down 17% organic in 1Q and management expecting wholesale to remain negative in FY26 across Zegna, Thom Browne, and Tom Ford, even as DTC reaches about 85% of branded revenues. Additional downside comes from uncertain China recovery, continued pressure in Europe, and the risk that a longer wholesale rationalization and higher SG&A spending delay operating leverage and profitability improvement.