Inditex: UBS expects growth to accelerate
(CercleFinance.com) - UBS confirms its buy rating on the Inditex share, focusing on the acceleration of the Spanish ready-to-wear giant's growth, whose stores include Zara.
While trimmed from 33 euros to 32 euros, the broker's 12-month target price suggests upside potential of over 20%.
"Our Buy thesis is that Inditex's model is well positioned to keep growing market share and offers a greater long-term profit growth opportunity than the market prices in," the broker says in its report.
UBS expects an acceleration in organic growth that should lead to this stock's "re-rating," which has lost about 13% of its value since last summer. "Zara is the best-placed apparel retailer globally to exploit accelerating fashion trends at scale in our view,"
UBS says, including the use of RFID "smart tags", which enable a better management of inventories and lead to limiting special offers. In short, like-for-like sales growth would rise from 3.7% this year to 5% in 2020, UBS predicts.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
While trimmed from 33 euros to 32 euros, the broker's 12-month target price suggests upside potential of over 20%.
"Our Buy thesis is that Inditex's model is well positioned to keep growing market share and offers a greater long-term profit growth opportunity than the market prices in," the broker says in its report.
UBS expects an acceleration in organic growth that should lead to this stock's "re-rating," which has lost about 13% of its value since last summer. "Zara is the best-placed apparel retailer globally to exploit accelerating fashion trends at scale in our view,"
UBS says, including the use of RFID "smart tags", which enable a better management of inventories and lead to limiting special offers. In short, like-for-like sales growth would rise from 3.7% this year to 5% in 2020, UBS predicts.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.