Inditex: Invest Securities raises target price
(CercleFinance.com) - The analyst points out that the share price of Spanish clothing group Inditex has risen sharply over the past month (+16%), reflecting optimism about progress in terms of covid vaccines.
However, the broker says that tougher health conditions in Europe will weigh on performance towards the end of the year. As a result, the broker has cut its 2020/21 EPS estimate by 21.7%, with a lesser impact on 2021/22 (-6.7%), before a slight increase in 2022/23 (+1.1%).
Despite this reduction in ST expectations, the recent easing of the risk premium has led analysts to reduce their WACC calculation to 5.96% (vs. 6.19% previously), even though they include a less favorable beta (1.1x vs. 1.05x) in order to take into account the shift to digital that the health crisis has accelerated.
Invest Securities has raised its target price for the share to 33.3 euros (versus 31.8 euros) and confirms its buy rating on it.
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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.
However, the broker says that tougher health conditions in Europe will weigh on performance towards the end of the year. As a result, the broker has cut its 2020/21 EPS estimate by 21.7%, with a lesser impact on 2021/22 (-6.7%), before a slight increase in 2022/23 (+1.1%).
Despite this reduction in ST expectations, the recent easing of the risk premium has led analysts to reduce their WACC calculation to 5.96% (vs. 6.19% previously), even though they include a less favorable beta (1.1x vs. 1.05x) in order to take into account the shift to digital that the health crisis has accelerated.
Invest Securities has raised its target price for the share to 33.3 euros (versus 31.8 euros) and confirms its buy rating on it.
Copyright (c) 2020 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.