Inditex has broken into the top ten of Europe’s largest companies by market value, climbing to eighth place just days before it unveils its 2023 annual results, which analysts expect will surpass prior records for turnover and profit.
Shares of the A Coruña-based group started last year at 24.6 euros and finished at 39.4 euros. The 60 percent rise put it among the five eurozone stocks with the strongest gains in 2023 in the Euro Stoxx 50 index, an uplift matched only by UniCredit, Ferrari, Stellantis, and BBVA. It was one of Europe’s standout winners in value terms. The euro area index’s overall rise was close to 20 percent, but Inditex outpaced that by a wide margin.
In 2024, the ascent remained steady, with the price hovering near its all‑time high reached on January 30, around 40 euros per share. This performance helped Inditex join the elite group of Europe’s ten most valuable companies and rise to the eighth position on the market cap chart.
First place on the list belongs to the luxury French house LVMH with a market capitalization of about 405.1 billion euros, followed by the Dutch chipmaker ASML at roughly 346.9 billion, and the French cosmetics giant L’Oréal at about 231.3 billion. In fourth place is Hermès, the Paris-based luxury fashion house, with about 226.4 billion, while fifth goes to the German software leader SAP at about 202.6 billion. TotalEnergies of France sits sixth with 157.7 billion, and Siemens of Germany is seventh with 140.3 billion. Inditex sits eighth with 122.2 billion in market value. Of the eight largest European companies by market capitalization, four are French, two are German, one is Dutch, and one is Spanish.
Inditex joined the Euro Stoxx 50 on September 19, 2011, four months after its tenth anniversary on the Spanish stock market, filling the spot left by Credit Agricole. After a rapid rise in recent months, the group remains the sole Spanish representative near the front of the European benchmark, as Iberdrola sits at position 20, Santander at 26, and BBVA at 27.
After closing Wednesday with a market capitalization of 122.204 billion, Inditex nearly matched the combined market value of Iberdrola and Banco Santander, which stand at 69.275 and 58.064 billion respectively.
The stock market momentum for Inditex looks set to continue into 2024. Bank of America analysts have included the textile group among their top picks, recommending buying the stock and lifting the price target to 45 euros per share, up from the prior estimate.
Bank of America notes that the group’s business model emphasizes product relevance over price, delivered through a broad, best‑in‑class omnichannel network. This approach is expected to support faster growth while funding reinvestments and sustaining high profitability.
The ascent into Europe’s top ten occurs less than a month before Inditex reports the 2023 results. All analysts expect the figures to be record‑setting, with pretax and net profits likely exceeding prior highs and earnings surpassing 5,000 million euros for the first time.
Bloomberg data point to a net profit near 5,355 million euros, which would be almost 30 percent higher than the 4,100 million posted in 2022. Revenue is forecast to surpass 35,000 million euros, versus 32,600 million in 2022. Market consensus for sales growth in 2024 and 2025 has risen, with projections around seven percent, above the longer‑term average of four to six percent.
The nine months to September 2023 already hinted at a record year. From February 1 to October 31, sales reached 25,069 million, about 11 percent higher year over year. Net earnings stood at 4,102 million, up roughly 32.5 percent and nearly matching the total for all of 2022.
Una nueva sociedad en Luxemburgo
To manage its patrimony and investments, Amancio Ortega established Pontegadea two decades ago. After a 2020 reorganization, the holdings arm comprises three main entities: Pontegadea Inversiones, Pontegadea GB 2020, and Partler 2006. Pontegadea Inversiones consolidates two decades of acquisitions and holds 50.01 percent of Inditex. Pontegadea GB 2020 groups the portfolio in the United Kingdom, while Partler Participaciones and Fongadea Recoletos oversee two other holdings in metals and real estate, respectively. Partler Participaciones owns about 9.28 percent of Inditex and 5 percent of Enagás, while Fongadea Recoletos operates two rental properties in Madrid.
Pontegadea Inversiones added Pontegadea Luxembourg in January to pool real estate investments valued at more than 3,300 million euros. This new entity aims to reorganize the group’s assets held in Luxembourg entities, according to reports from media outlets.
While some may read this move as tax optimization, sources from the group deny that intention, noting that real‑world tax planning for tangible assets is highly constrained and practical only in limited scenarios.
The new Luxembourg vehicle does not alter the fundamental structure of Pontegadea’s portfolio, but it signals an ongoing effort to optimize asset management and investment allocation for the sprawling Inditex ecosystem and its principal shareholder.