Inditex is getting ready to surprise again. Analysts will be looking very closely at the second quarter accounts to be presented by the textile company this Wednesday.. When the figures for the first six months of the year are on the table, investors will be able to get an idea of the direction the group is heading. Although no surprises are expected. The consensus in the market is that sales will be around €9.86 billion, up 21% from the first quarter, and profits will be €1.49 billion, up 15.2% from the first quarter.
Beyond the figures covered by the market consensus, consulted analysts emphasize that: The Inditex model has proven its robustness in recent months and has risen rapidly The company’s historical maximum capitalization has exceeded 150,000 million. “The company’s price is close to 50 euros per share, in one of its best moments. Although the macroeconomic situation casts serious doubts on retail sales, the Spanish company’s valuation is brighter than ever. It has managed to manage its inventory, explains Tressis capital analyst José Francisco Ibáñez: “The brand’s range has allowed it to adapt its offers to almost all audiences and it has been able to take advantage of new trends thanks to collaborations with designers and capsule collections.”
iBroker analyst Antonio Castelo said remember this before company results presentation has already said its second quarter has started well, with sales up 12%“They also confirmed that they will continue with their $1.8 billion investment target, putting extraordinary investments of 900 million on the table over the next two years for expansion and logistics improvement plans,” he says. According to Castelo, the company’s business model is so developed and flexible that it can quickly adapt to customer demands. “This allows it to continue to pay shareholders very well. They have announced a dividend that will be 28% higher than last year, reaching 1.54 euros per share when ordinary and extraordinary dividends are added,” he explains.
The analysts’ positive outlook has not changed in recent months, as they have maintained their results expectations. “This is a value that demonstrates stability and shows that the company is transparent in its annual results targets. The management’s continuity and positivity is also reflected in the good performance of the shares.“says Link Securities analyst Juan José Fernández-Figares.
All the value generated in the Stock Market is based on a business model that manages to combine physical sales with a significant commitment to the digital channel.“They know how to diversify geographies and still have growth potential. They also know how to diversify their products, from cosmetics to shoes and household goods. They have built a business model that is very different from their competitors and that is why we can expect good results this Wednesday,” says Norbolsa analyst Sara Hernández. “It is also worth highlighting other virtues such as logistics, its growth in both physical stores and online, and its brand strength,” says José Francisco Ibáñez of Tressis.
Revaluation potential
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Analysts also warn that Inditex’s current price has limited upside potential. “It is trading very close to its recent highs of around 50 euros per share; however, this is slightly above the level that market consensus analysts have set. At current levels, the upside potential is very limited,” says Antonio Castelo. Juan José Fernández-Figares of Link Securities agrees. “Unless the company can accelerate its profit growth, I don’t think buying Inditex shares at these prices is very attractive.”reassures Fernández-Figares.
However, Antonio Castelo from iBroker said, Ensures that Inditex is a value to be trusted in the long term“The stock market trend is clearly bullish and it is foreseeable that it will continue to do so in the short to medium term, as it has so far. If the investor already has a position and is in it, it is best to continue it,” he points out. “The attractiveness of the market lies not only in the results of the next three months, but also in the long-term positioning,” concludes José Francisco Ibáñez of Tressis.