Inditex: BarCap raises target price to 34 euros
(CercleFinance.com) - Barclays Capital has raised its target price for Spain's Inditex from 32 euros to 34 euros, while maintaining an "overweight" rating on the stock, after the owner of clothing store Zara posted results that reassured investors that the long-term story is "on track.
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Although first-quarter sales were slightly below its expectations, BarCap thinks they were "relatively strong" given external trading conditions.
"More importantly, we see margins as a source of potential upside for the remainder of the year," it added.
Barclays sees room for margin expansion, given benefits from US dollar sourcing starting to come through and tight opex control.
While the shares are obviously not cheap according to the broker, they offer good value given the company's differentiated, globally scalable and highly cash-generative business model, BarCap said.
Copyright (c) 2018 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.
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Although first-quarter sales were slightly below its expectations, BarCap thinks they were "relatively strong" given external trading conditions.
"More importantly, we see margins as a source of potential upside for the remainder of the year," it added.
Barclays sees room for margin expansion, given benefits from US dollar sourcing starting to come through and tight opex control.
While the shares are obviously not cheap according to the broker, they offer good value given the company's differentiated, globally scalable and highly cash-generative business model, BarCap said.
Copyright (c) 2018 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.