Inditex hits highs on the stock market and is close to 115,000 million capitalization

2023-11-21 19:07:27

Inditex closed today’s stock market session on Tuesday at historical highs and close to 115,000 million euros in capitalization. The company’s shares ended with a rise of 1.51%, up to 36.88 euros per share. In this way, the company has surpassed the ceiling it reached in June 2017, when it reached 36.66 euros per share; and closed the day with a capitalization of 114,940 million euros. So far this year, Inditex shares have appreciated 36.88%.

Diego Morín, IG analyst, has pointed out that the textile giant is returning to the maximum zone after taking a “break” in its price, something that he considers “logical and natural after bringing a strong rise since September 2022” and considers that The technical outlook has not changed for the medium and long term. “At a fundamental level, it maintains solid long-term growth plans, with global sales giving it room to raise prices and it is expected to continue improving the business even despite a recession. Its cash remains strong because they do not need to undertake any major investment, which is positive to remunerate shareholders,” adds Morín, according to Efe.

This Tuesday, two analysis firms have issued recommendations on the company. Caixabank BPI maintains the recommendation at “buy” and the target price at 39.90 euros. Morgan Stanley also maintains its recommendation at “equal weight/in line” and the target price at 38 euros per share.

Analysts have raised their stock price target

Barclays has also raised Inditex’s valuation to 32 euros per share from the previous 30 euros, while predicting that the company founded by Amancio Ortega will present “solid” results on December 13 in the third quarter of its fiscal year. Specifically, the entity, which raises its earnings per share forecasts, foresees double-digit sales growth in constant currency for the Galician company and an improvement in gross margin. In his opinion, the evolution of income seems “resistant.” “We expect Inditex sales in constant currency to increase a solid 12% year-on-year during the third quarter ended October 2023 (up from +16.9% in the first quarter, +16.4% in the second quarter and +14 % between August 1 and September 11, 2023)”, they point out from Barclays.

The entity has also highlighted that the “good” expected results are mainly from Inditex’s “solid and differentiated” business. “We believe that local sourcing and shorter delivery times have allowed the group to grow at a faster pace,” said Barclays analysts, who also estimate a “strong” rise in gross margin of 120 basis points, up to 61.4%.

The market consensus, according to Bloomberg, indicates that 64.7% of the analysts who follow Inditex issue a “buy” recommendation; 32.4% opt for “hold” and 2.9% recommend “sell.”