November 21, 2023
Inditex SA shares are headed for the highest close since the retailer’s initial public offering in 2001, as analysts become increasingly optimistic ahead of third-quarter results.
The Zara owner gained as much as 1.3% to 36.81 euros in Madrid trading on Tuesday, the highest intraday price since June 2017.
The retailer’s fast fashion business model and online presence have helped the stock rise about 50% this year, outperforming a retail sector that is performing best in Europe. The Stoxx Europe 600 retail index is up 26% in 2023 as customers flocked to stores following pandemic-era closures.
Inditex will announce its results on December 13 and analysts expect the Spanish company to post record quarterly net income, according to data compiled by Bloomberg.
Morgan Stanley analyst Grace Smalley says an improvement in Inditex’s gross margin could serve as a “bright spot” during the third quarter, amid headwinds from unusually warm weather and adverse currency movements.
“Inditex continues to outperform and gain market share, led by continued widening of the company’s moat and differentiation in products and store experience relative to its peers,” Smalley wrote in a note, raising his bullish and bearish targets on the stock, but leaving its €38 price target unchanged.