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Inditex aims for its maximum value on the stock market in full ‘boom’ of sales and without debt

Date: July 18, 2024 Time: 10:56:25

Inditex returns to the path of highs this 2023 Then came the best first quarter in its history, and now it is on its way to crystallizing a record valuation on the stock market. The textile giant has exceeded 110,000 million capitalization this Wednesday, with which it remains less than 3% of the 113,800 million harvested at the beginning of May 2017, the highest level reached to date.

The owner of brands such as Zara, Stradivarius or Bershka has experienced a meteoric rise in the Ibex 35 that has led her to register a revaluation of 42.6% so far this year and be the member of the selective that rises the most. In fact, this ‘rally’ has caused its titles to now move at 35.45 euros, an unprecedented level adjusted for the payment of the dividend, which is discounted from the price. Without subtracting the remuneration to the shareholder, the titles came to exceed 36.53 euros six years ago.

The vertical rise experienced since the start of 2023 has accelerated in recent weeks, relegating members of the tourism sector such as Amadeus (+38.37%), Meliá (+36.7%), IAG (+36%) or Aena (+23) %), which until now led the ‘acceleration’ of the Ibex, a second plane. In other words, Inditex is already worth 30,000 million more on the stock market than at the end of last year, a ‘horribilis’ exercise from which it has recovered better than initially expected.

Without a presence in Russia -which was its second largest market until February 2022-, as well as in Ukraine, as a result of the outbreak of the war in the country, they have not meant any impediment for it to continue pulverizing new milestones in terms of its activity. yes referee. In fact, analysts expect them to maintain that pace for the next two years. Specifically, estimate earnings to be slightly above $5 billion at the end of its 2023 fiscal year, which will take place in February 2024, and reach $5.3 billion by 2025, while estimating a sales rebound slightly from 32,500 million to 35,000 million at the end of this fiscal year and 38,280 million for the next.

Sources also point out that the sales season is being especially good, above expectations. “Inditex is taking advantage of a decade of strategic investments in the business,” say Deutsche Bank analysts, who emphasize that the group “has reached a threshold that is almost insurmountable for its competitors.” All this despite the latest salary agreement that implies a fixed minimum floor of 18,000 euros gross per year. Added to this is the volume of net cash, which has rebounded 14% between March and May, to 10,508 million, a point in its favor in a context marked by the increase in financing costs and in view of which investors are punishing the securities with the highest debt on its balance sheet.

Inditex’s new focus is now on the United States, a country where they have found “great opportunities for long-term growth.” Only between the period 2023-2025 they plan at least 30 projects in different locations such as New York, Los Angeles, Miami, Chicago, Boston or Las Vegas, including new stores, expansions or relocations. At the end of February 2023, it had more than 5,800 establishments distributed in different geographies between America, Asia and Europe. The Old Continent channels most of its market share after accounting for more than 47% of total sales in its last full fiscal year without counting Spain, which concentrates more than 14%.

In this context, analysts have been reviewing this value upwards for months so as not to miss the race. Among the latest to do so, CaixaBank BPI stands out, which places the share close to 40 euros, while Citi and JP Morgan see Inditex at 38 euros, also in line with Bestinver’s (38.85 euros). After the latest updates, the theoretical price given by the ‘Bloomberg’ consensus rose to 36.38 euros, 2.6% more than on Wednesday’s price and, although the number of houses of analysis that recommends buying (62.9%), compared to 64% the previous month, the group of those who advise only buying reaches 5.7%.

20,000 million above the levels at which it moved to when the departure of the historic Pablo Isla was announced as president of the Arteixo-based group. This has also been accompanied by a greater weight within the Ibex, with which it goes from representing 11.9% to 13.41%. Only Iberdrola resists, whose titles weight 15.3% within the index. The difference between one and the other is in their ‘free float’ because while the energy company negotiates 100% of its titles in the market, in the case of the Galician company, more than 60% of the shares are in the hands of the Ortega family, so they are not traded on the market.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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