FRANKFURT (dpa-AFX) - Shares in Zalando rose by 3.6 percent to 25.09 euros on Monday morning following a buy recommendation. After the setback on Friday - in a very weak overall market - the shares attempted to build on the recovery that began in mid-March. This had driven the shares, which were also badly hit in 2023, up by around 46% to almost EUR 27, taking them to a high since September. In the past week, however, it then fell again a little.

Citigroup analyst Monique Pollard now considers the market expectations for adjusted earnings before interest and taxes (EBIT) in the current year to be too low. Positive major effects in fulfillment costs - i.e. the costs for delivery, payment processing and content creation - are generally underestimated. In addition, the expected strong generation of cash inflows could allow the online fashion retailer to buy back shares. Against this backdrop, Pollard upgraded the shares to "buy" with a target price of 32 euros.

Zalando has had a difficult few years. With a share price loss of a good 35 percent, the shares brought up the rear of the DAX in 2023 - following a price slump of more than half in the previous year. Customers' reluctance to buy in the face of high inflation and economic uncertainty, high stock levels, sales with high discounts - all of this had weighed heavily on the fashion industry in some cases. The fact that Zalando made progress in containing costs at the same time did not help the shares.

At times, the share price even fell below the issue price of 21.50 euros from the IPO in fall 2014, followed by a record low of just under 16 euros at the beginning of 2024.

Despite the latest recovery attempt, the record of almost EUR 106 reached in mid-2021 remains a long way off. At that time - in the middle of the coronavirus pandemic - online trading was booming and internet stocks were booming./mis/ajx/stk