Ermenegildo Zegna stock initiated at Buy by HSBC on growth outlook

HSBC has assigned a Buy rating to Ermenegildo Zegna Group (NYSE:ZGN) and set a price target of $16.00 per share. The stock experienced a remarkable 31% increase over the past year, outpacing the S&P 500's 14% growth. Zegna's ZEGNA brand demonstrated organic growth of 13.8% in the first half of 2026, surpassing the sector's 6.6% growth rate.

The firm attributes this success to the growing popularity of Made-to-Measure products. HSBC projects Made-to-Measure sales densities to rise from EUR21,000 per square meter in fiscal 2025 to over EUR28,000 per square meter in fiscal 2028, contributing to increased sales. The firm anticipates direct-to-consumer growth will generate approximately 120 basis points more gross margin expansion than industry averages from 2026 to 2028.

HSBC analyst Bhumi Kanabar highlighted Zegna's focus on high net worth individuals, suggesting these customers may be more resilient to economic downturns. Recently, the company reported first-half 2026 revenue of $517.12 million, surpassing the $483 million forecast by 7.06%. While revenue grew, profits declined; however, adjusted EBIT increased to EUR74 million from EUR69 million the prior year.

This improvement indicates strong direct-to-consumer sales and a favorable product mix. Despite this positive performance, Goldman Sachs has maintained a Neutral rating on Zegna stock with a price target of $14.00, as confirmed by analyst Erwan Rambourg. The mixed outlook reflects the company's strong revenue generation but profitability challenges.