Ermenegildo Zegna Outlook: Technical Weakness and Mixed Fundamentals

Market Snapshot

Headline Takeaway: Ermenegildo Zegna (ZGN.N) is showing a steep price decline of -8.17% recently, with a weak technical outlook and diverging analyst ratings.

News Highlights

Recent Developments:

• Trump’s Steel Tariff Hike: On May 31, 2025, President Donald Trump raised steel tariffs to 50%, adding uncertainty to global trade and impacting industries reliant on imported materials. This creates a broader macroeconomic headwind for luxury and high-end goods manufacturers like Zegna.
• China’s Shifting Luxury Appetite: A May 27 report highlighted that China’s luxury consumption is evolving. While once the top market for high-end goods, the country is now seeing a shift in purchasing habits, which could affect brands like Zegna that rely heavily on Asian demand.
• Competition in Luxury Housing and Automotive: Aparna Constructions announced a major luxury housing project in Hyderabad, and Huawei-JAC launched the Maextro S800 sedan on May 30. These developments suggest a competitive push in luxury goods and real estate, potentially diluting Zegna's market share in premium segments.

Analyst Views & Fundamentals

Analysts remain cautious about Zegna's outlook. The simple average rating is 3.00, while the performance-weighted rating stands at 1.39, reflecting poor historical performance by the single active analyst, Daria Nasledysheva from B of A Securities. Her 33.3% win rate and a -0.59% average return over three historical predictions suggest a low degree of confidence in her guidance.

These ratings are mixed with the stock's recent price performance. The stock has fallen -8.17% in the past five days, aligning with the "Underperform" rating assigned by B of A Securities.

Key Fundamental Factors and Model Scores:

• Net cash flow from operating activities per share (YoY growth rate %): -12.81% (internal diagnostic score: 1.00)
• ROE (diluted) (YoY growth rate %): 4.49% (internal diagnostic score: 9.37)
• Income tax / Total profit %: 29.57% (internal diagnostic score: 3.00)
• Net profit / Total profit %: 70.43% (internal diagnostic score: 0.00)

While ROE shows strength, the poor cash flow and high tax ratio indicate operational and profitability concerns.

Money-Flow Trends

Despite the bearish price trend, fund flow data shows a positive overall trend, with inflow ratios consistently above 50% across all investor categories. The overall inflow ratio is 52.06%, suggesting that while retail and institutional investors are cautious, they are still slightly net buyers. The fund-flow score is 7.78 (internal diagnostic score: good), indicating that the stock is not entirely being abandoned in the market.

Key Technical Signals

Technically, Zegna is showing clear bearish signals. The technical score is a low 2.78 (internal diagnostic score), with four bearish indicators outweighing any bullish ones. Key indicators and their internal scores include:

• MACD Golden Cross: 1.00 (biased bearish)
• Marubozu White: 1.34 (biased bearish)
• Hanging Man: 1.00 (biased bearish)
• WR Oversold: 3.91 (neutral rise)

Recent Chart Patterns:

• Jan 16, 2026: A Bullish Engulfing pattern was detected, which is rare and has a strong bullish score of 6.67. However, this was quickly followed by a MACD Golden Cross (bearish) on Jan 8.
• Jan 14, 2026: A Hanging Man pattern emerged, signaling a top and potential reversal.

Key Insight: The technical indicators show a weak market with a bearish bias, and the risk of further decline is high. Investors should proceed with caution.

Conclusion

Actionable Takeaway: Given the weak technical outlook and mixed fundamentals, it might be wise to avoid entering new long positions at this time and consider watching for clearer breakouts or pullbacks. The stock is showing signs of distress, and while inflows remain slightly positive, they are not enough to counter the broader bearish sentiment.