On Thursday, RBC Capital Markets adjusted its outlook on Inditex (BME:ITX:SM) (OTC: IDEXY), the parent company of fashion retailer Zara, by increasing the price target to EUR47.00 from the previous EUR42.00. The firm has maintained its Outperform rating for the stock.
Inditex unveiled robust full-year results today, which has led to the revised price target. The company is entering a new stage of growth, characterized by significant investments in its logistics infrastructure. This enhancement is expected to support a more rapid expansion pace.
According to the analyst at RBC Capital, the upward revision in the price target is influenced by a rolled forward discounted cash flow (DCF) analysis. This method now incorporates a slightly higher terminal growth rate, which reflects the company’s strong performance and future growth prospects.
The firm also made slight adjustments to its earnings per share (EPS) forecasts for fiscal years 2025 and 2026, aligning with Inditex’s financial trajectory and market expectations.
Inditex has been focusing on integrating its online and offline presence, investing in technology and logistics to improve customer experience and streamline operations.
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