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Zegna's profitability and cash flow improve, boosting valuation despite weak Thom Browne brand.

Analyst Insights
06 Sep 2026
Seeking Alpha
View Source
Bullish
Zegna's profitability and cash flow improve, boosting valuation despite weak Thom Browne brand.

Ermenegildo Zegna N.V. shows stronger profitability driven by better direct-to-consumer sales and operating leverage, enabling margin growth without heavy store expansion. While Tom Ford Fashion improves, Thom Browne remains weak, but the company’s upgrade does not depend on full recovery from these brands. Cash flow has significantly improved, enhancing earnings quality. The valuation is more attractive after a share price drop, supported by higher 2026 earnings expectations and potential margin gains in 2027.

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