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Inditex: UBS upgrades shares to 'buy'

(CercleFinance.com) - UBS has upgraded its rating on Inditex from "neutral" to "buy," saying that it expects the Spanish clothing retailer's recent investment in RFID technology to pay off.

In a research report sent to clients, the broker said Inditex's recent move in Radio Frequency Identification Technology bodes well for further multi-channel revenue growth, and at a lower cost to serve.

"The strategic combination of flagships and e-commerce has served Inditex well over the last few years," UBS wrote in the report.

"With Zara now 100% RFID, Inditex is seeking to use this capability to drive profitable online sales further," it added.

UBS thinks RFID is potentially the "holy grail" for multi-channel retailers, as the technology gives faster and more accurate information, hence being particularly useful for e-commerce.

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