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Investing.com - UBS upgraded Inditex (BME:ITX) (OTC:IDEXF) from Neutral to Buy and raised its price target to EUR52.00 from EUR48.00, citing strong execution and an attractive entry point following recent share price declines.
The upgrade comes as Inditex reported a strong start to the autumn/winter season with 9% growth and 11% comparable sales, showing steadily improving top-line performance throughout the year.
UBS noted that Inditex has consistently outperformed the global fashion market by approximately 5 percentage points over the past 12 years, excluding the COVID period, and expects the company to deliver like-for-like growth in the upper half of the 4%-6% range.
The investment bank projects a stable EBIT margin of approximately 19.5% in the near term, highlighting Inditex’s resilient gross margin performance during challenging market conditions over the past four years.
UBS forecasts a 9% earnings per share compound annual growth rate over the next four years, with a total shareholder return exceeding 13% and an industry-leading cash flow return on investment of 15%.
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