Morgan Stanley Upgrades Zalando to 'Equal-Weight' as Valuation Stabilizes

Morgan Stanley has upgraded German e-commerce giant Zalando SE to an 'equal-weight' rating from its previous 'underweight' stance. The investment bank set a new price target of €23 for the shares, signaling a shift toward a more neutral outlook following a nearly 50% decline in the stock price over the last 12 months. Analysts suggest that the stock's risk-reward profile has finally stabilized, with valuations now aligning more closely with global industry peers. According to the report, the period of valuation compression has likely concluded, as the stock currently trades at 13x its 2027 earnings estimates. This move is expected to provide a sentiment boost for Zalando, potentially marking a turning point after a prolonged period of underperformance in the European equity markets.