(New: more details)

FRANKFURT (dpa-AFX Broker) - A skeptical analyst commentary on Monday intensified Zalando's recent slide. At times, the shares of the online fashion retailer fell by double-digit percentages following a downgrade to "equal-weight" by the US bank Morgan Stanley. The share price only managed to recover close to the 20 euro mark, its lowest level since mid-March. Most recently, the drop amounted to 6.2 percent to 21.15 euros.

After an initial period of weakness at the beginning of the year and a subsequent recovery, Zalando shares slipped back into negative territory. For the first time since March, the share price is now back below the 200-day line, which is a popular indicator of the longer-term trend among investors. Since the April high, the Zalando share price has fallen by almost a quarter.

In his study, analyst Luke Holbrook from the investment bank Morgan Stanley put a question mark over Zalando's medium-term growth ambitions. His estimates for gross merchandise volume and sales tend to be at the lower end of the target ranges. Much depends on the economic recovery and the competitive environment, the expert emphasized. Compared to Zalando, he expressed his preference for the shares of the Polish internet platform Allegro. Its share price rose by around one percent in Warsaw.

Holbrook went on to argue that online clothing retail is not an attractive sub-sector in Europe as it is facing structural headwinds. He no longer sees potential margin increases, which Zalando is targeting due to improved warehousing and more efficient order processing, as a share price driver. Such advantages are known and already priced into the share price.

It was no consolation to investors that Holbrook's price target is above the current Xetra price level. He lowered it from 28 to 24 euros and the new rating for Zalando is now "Equal-Weight" following the removal of the "Overweight" recommendation./tih/edh/mis


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