A new week of trading begins and Inditex is attracting a lot of attention since, as usual, it will close the Ibex 35 results calendar on September 11 with the accounts for the second quarter (which includes, in its case, from May to July). This occasion will not be far from the previous ones, at least the consensus of the experts that includes Bloomberg, what do you think a growth of almost 11% compared to what was reported in the second quarter of 2023with a net profit of 1,492 million euros, compared to 1,345 million declared then. For the full year, experts predict profits of 5.955 million for the parent company of Zara, which would also be 10.7% more than what was declared in 2023, when it had already set a historical record of profits by exceeding 5 billion.
“Inditex’s renewed program of opening spaces, after three years of consolidation that reduced the number of stores by 24%, to 5,692, is a sign that revenue growth can accelerate, with online sales stabilized at around 25% of the totalThe company has opened several flagship stores to strengthen the attractiveness of physical commerce, while continuing its digital growth, particularly in countries where it is underrepresented,” explain the experts at Bloomberg Intelligence, which indicate that the Galician has demonstrated her strength during the difficult season that the retail European, “ensuring that sales are limited and keeping stocks under control,” they add.
Barclays explains that, although sales growth is expected to slow in the second quarter (as it already did in the first), “We hope that Inditex will be able to further improve its profitability.” “We expect Inditex sales at constant exchange rates to increase by 9.4% in the second quarter. While this will mark a sequential slowdown compared to previous quarters, it is still a very solid and respectable result due to the notably “particularly challenging” comparison basis (sales at constant exchange rates increased by 18% in Q2 2023), the unfavourable weather conditions in May/June and the persistence of the financial crisis,” the firm said.
So while Inditex’s sales growth will likely be impacted by this challenging environment, Barclays add, “we believe this will be offset by the increasing contribution from new space growth,” they conclude.
From JP Morgan, which chooses Inditex as one of the favorites in the sector retail, with Marks & Spencer, expect second-quarter EBIT to increase 9% year-on-year to EUR 1,825 million, in line with forecasts Bloomberg. However, they are reducing the annual forecast by 1% “to account for currency translation”. “Although it outperformed its European peer H&M by around 30% over the year, our updated valuation analysis suggests that Inditex is one of the most profitable companies in the sector and continues to provide value to the luxury and luxury goods sector. retail“, they argue from the analysis firm, where they recommend buying the shares of the textile company.
In Renta 4, they hope that on Wednesday the textile company will reiterate its vision that it has many growth opportunities and that it will confirm the objectives for 2024, which are “a very moderate growth in store space, a monetary impact on sales -2 basis points” compared to 2023, stable gross margin, investments of 1,800 million euros and a dividend of 1.54 euros per share (27% more than in 2023)”, they develop.
Inditex’s results could further increase its price after the declines of the last few sessions (following the rest of the market). The textile company once again revalidated historical highs on August 23 and became the first Spanish listed company to reach 150 billion euros in market capitalization. At the close of Monday, the Galician company had a market value of 145,080 million, with which remains the sixth company in the EuroStoxx 50, by surpassing – it did so when it reached 150 billion – TotalEnergies, which it had not achieved before, except during certain specific sessions in 2020.
Up 18% since January 1, it offers an upside potential of nearly 5%, until reaching the target price of 49.03 euros set by the consensus. In this sense, There are already eight analysis houses that see it above 50 euros. HSBC is the one that gives it the highest price target, at 53 euros. Regarding the recommendation, experts consider that it is time to keep your shares in your portfolio.
