Inditex: Invest Securities downgrades stock

(CercleFinance.com) - The analyst says that since its last update of 16 September, the Spanish clothing group's stock has significantly outperformed (+13pts in relative terms) in the wake of Q2 results, which, although in line, included a gross margin that was clearly above expectations.


In the wake of this performance, we are updating our valuation model to take into account the rise in interest rates and the pressure on the equity market risk premium observed over the period.

As a result, analysts reach a WACC of 7.04% (vs. 6.49%) and a target price of 32.5 euros (vs. 35.8 euros previously), which means that there is no longer sufficient upside potential to justify a Buy rating (+3%), Invest Securities adds.

As a result, the broker have downgrade its rating on the stock to neutral and has removed Inditex from its IS Selection list today.


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