Inditex: HSBC raises target ahead of results

(CercleFinance.com) - On Wednesday, HSBC raised its target price on Inditex from 53 to 55 euros, while maintaining its recommendation on the Spanish ready-to-wear giant's shares.


In a research note, the British broker believes that the group's forthcoming results could slightly surprise on the upside, given the improvement in demand.

The broker also believes that the company's shorter lead times and more proximity-based model give it a competitive edge to outperform its rivals.

While noting that the stock is currently trading at a P/E of 24.5x, above its five-year average of 23x, HSBC considers this valuation justified in view of the group's current earnings momentum, superior organic growth, operating model advantages and strong cash flow.

Inditex is due to publish its half-year results on September 11.

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