Analysts are rushing en masse to review Inditex. The results of its last fiscal year, which have been in line with what was expected by the market, surpassing the barrier of 4,000 million profit -a record figure-, have led it to ratify its support for the textile giant. Apart from its behavior on the stock market, which has been distorted by market volatility in recent days, the investment bank reaffirms its commitment to the third heavyweight of the Ibex 35, which has a representation in the index of 11.5 %.
With nuanced differences between the analysis houses, the ‘Bloomberg’ consensus continues to advise buying (70% recommendations), compared to 3% that invites you to buy. Among the firms that support it are JB Capital Markets, Bestinver Securities, Morningstar, Banco Sabadell, Jefferies or Citi. All of them follow the same pattern: they maintain the price with respect to the reviews carried out previously, which exceeds 30 euros.
Analysts fell short on Inditex’s valuation at the beginning of the year, which led them to inject gasoline at this value so as not to miss the race. The company founded by Amancio Ortega has taken advantage of the tailwinds that have pushed the financial markets from the start of the year until last week, boosting its stock market value. After the elimination of the last few weeks, the titles accumulate a revaluation in the annual computation of more than 15%, with data from the market closing of this Thursday.
From Renta 4 they highlight the ability of the firm that owns brands such as Zara or Stradivarius to increase its sales by more than 17% compared to 2021 despite having 10% fewer establishments, mainly due to the cessation of its operations in Russia (its second largest market) and Ukraine, in the aftermath of the war. In this sense, Bloomberg Intelligence highlights among its strong points the increase in turnover, the reinforcement of the dividend by 29%, up to 1.2 euros per share, and the expansion plan in the United States.
Jefferies, for its part, also defends that the investment plan to optimize its logistics area worth 1,600 million can help prop up Inditex’s future growth. This forecast contrasts with that of Credit Suisse, since it focuses on the margins that the market expects for this year. Between March 2022 and February 2023, this has been 17% higher, up to 18,500 million, a figure that it considers will suffer deterioration, will reduce its EPS, its EPS forecast (Earnings per Share) to 1.29 euros, compared to to 1.33 that the consensus awaits.
Stock is trading at ‘Isla era’ levels
One year after the start of the Russian invasion of Ukraine, the company has managed to recover on the stock market from the blow that entailed the sale of its business in Russia and from the stock market fall that it took in mid-February. The salary agreement with the unions, with which a minimum remuneration of 18,000 euros was set, led the firm to lose 5%, which translated into a loss of 4,000 million on the stock market in a single day.
The titles of the Galician firm are back at 28 euros, the level at which they were trading when they announced the replacement at the top that resulted in the departure of Pablo Isla and the rise of Marta Ortega to the non-executive presidency. This has allowed it to move again in the 90,000 million capitalization. The negative note is that after this ‘acceleration’ it cuts its twelve-month potential, which is cut to 8.3% and stands as one of the Ibex 35 firms closest to reaching its target price.
