ERMENEGILDO ZEGNA GROUP (=) : Strong start to the year - can they deliver on profitability?

Research evidence excerpt

ERMENEGILDO ZEGNA GROUP (=) : Strong start to the year - can they deliver on profitability?

EQUITIES

LUXURY GOODS

NEUTRAL TARGET PRICE EPS 26e EPS 27eERMENEGILDO ZEGNA GROUP PRICE* USD12.5  TARGET PRICE USD12.4 (DOWNSIDE 1%)  22%  -1%  5%

Strong start to the year – can they deliver on profitability?

Whilst retail topline dynamics at E. Zegna Group are impressive, ROCE is amongst the lowest in our13 MAY 2026

Securities Research Report coverage. We see delivery on FY26 profitability as key to sustaining the ongoing re-rating. We raise

Production time: 05:24* (London time)

our TP to USD12.4 on higher topline and profitability prospects, reflecting 20x ’27 PE (prev 18x). We

Research Analysts & Publishing Entities

remain Neutral as valuation seems full in the context of limited cash generation, Tom Ford Fashion

Anthony Charchafji remaining loss-making this year, and Thom Browne turnaround not showing enough green shoots.BNP Paribas London Branch

(+44) 20 3430 8536

anthony.charchafji@uk.bnpparibas.com Strong start to the year

1Q26 revs were up 7% OSG, o/w DTC accelerating (all three brands) to +14% and Greater China

Melania Grippo

turning positive. We were particularly impressed by the resilience in the Middle East, up DDs in theBNP Paribas SA

(+39) 02 89 63 1724 quarter whilst the cluster did not even turn negative over March-April thanks to strong sales in

melania.grippo@bnpparibas.com Europe. Current trends remain supportive, although decelerating a touch due to ME.

Antoine Belge

BNP Paribas SA Can the group deliver on profitability?

(+33) 01 44 95 68 51 This year, the group will face a cEUR20m FX headwind on EBIT, increased IT expenses and ongoing

antoine.belge@bnpparibas.com

fixed cost increases on stores.