Inditex: still a buyer, UBS maintains target price

(CercleFinance.com) - UBS is maintaining its buy rating on the share of the Spanish textile giant Inditex, even after the group's presentation of its annual results were shunned by the market yesterday.

The broker's 12-month target price of 32 euros suggests upside potential of over 25%.

Admittedly, organic sales growth decelerated to 3% in the second half of 2018, UBS says, although this supposes that it rebounded between the 3rd and 4th quarters to reach between 3% and 4%.

In addition, UBS notes that Inditex has increased its dividend policy by raising its target distribution rate from 50% to 60%, which will include the payment of an exceptional coupon totaling one euro per share in the next few years. Finally, in 2019 the group targets organic growth of between 4% and 6%, which is in line with UBS' forecast of 5%.



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