Can Ermenegildo Zegna NV (ZGN) Sustain the Momentum with Affluent Consumers?

Core Viewpoint - Ermenegildo Zegna Group (NYSE:ZGN) is considered one of the best Italian stocks to buy in 2026, with recent upgrades from Morgan Stanley and UBS indicating positive momentum in sales and brand performance [1][3]. Financial Performance - In Q4 2025, Ermenegildo Zegna's revenue increased by 4.6% to €591 million, while the full-year revenue rose by 1% to €1.917 billion [4]. - The Zegna brand accounts for approximately 60% of the company's total sales, reflecting strong consumer engagement and profitability [4]. Analyst Ratings and Price Targets - Morgan Stanley upgraded Zegna's stock rating to Equalweight from Underweight, setting a price target of $11, citing better-than-expected Q4 sales results [1]. - UBS also upgraded Zegna to a Buy from Neutral, raising the price target to $11.50 from $11, highlighting strong momentum driven by Western consumers [3]. Store Portfolio and Brand Concerns - Analyst Natasha Bonnet from Morgan Stanley expressed cautious optimism regarding Zegna's store portfolio optimization but raised concerns about the company's wholesale rationalization, particularly for the Tom Ford and Thom Browne brands [2].