ZALANDO - SELL | EUR26 VS. EUR38 (+1%) End of the tunnel not yet in sight with persisting downward risks
ZALANDO - SELL | EUR26 VS. EUR38 (+1%)End of the tunnel not yet in sight with persisting downward risks
In this insight, we analyse Zalando’s recent FY 22 profit warning. After a deep dive into the assumptions behind this warning, we understand that Zalando is still betting on ambitious H2 assumptions despite the clearly deteriorating macro-eoconmic environment. We stand at the low end of the new EBIT range and still see some downward risks for FY 22 and FY 23. Sell reiterated despite what appears to be very short-term support provided by a likely short squeeze and arrival of value funds. Valuation might have bottomed out but we foresee no rerating before 2023 and argue there is an opportunity cost to staying in the stock instead of jumping into food players.
Zalando is an e-commerce group based in Germany. Co. is engaged in the online retailing of clothing, shoes and accessories for women, men and children. Co.'s product offering include more than 1,500 brands, including global and local brands, as well as private labels, including shoes, clothing and accessores as well as sportswear and homeware designed especially for the Co. The Co.'s product offering is complimented by the Zalando Lounge and Zalon apps, which provides registered members special offers at discounted prices. Co. also provides a combination of services that include free delivery and returns.
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
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