Zalando: SG initiates coverage with buy - targets 67 euros.

(CercleFinance.com) - Société générale (SG) has started tracking the share of German online fashion retailer Zalando, beginning its coverage with a buy rating.
It has a 12-month target price of 67 euros, meaning upside potential of 65%.

SG believes that unlike the British player, Asos, Zalando is better positioned to take advantage of " the next phase of online fashion retail". Within five years, analysts say that social media giants, such as Facebook, Pinterest, and Google " could start to play a very significant role in the fashion retail market " as they seek to monetise the traffic they generate. However, these companies will probably prefer to avoid heavy investments and rely on companies such as Zalando, rather than compete with them.

SG also distinguishes Zalando for its technological investments and in infrastructure (logistics), as well as its "impressive medium-term sales and profit growth rates." This will enable it to gain market share.



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