Inditex, in a minimum of August 2024 after collapsing 7%: is it an excessive reaction?

Inditex does not convince the market. Marking a record after another has been positive in the last five years for the Bag of the textile group founded by Amancio Ortega that played historical maximums in the 55.98 euros per action on December 4, 2024, but it is no longer enough. The company based in Arteixo (A Coruña) since then retreats more than 19.5% and from the annual maximum Lose from the beginning of the session on Wednesday just over 7%.

The rapid reading that the market makes is that if during the first weeks of 2025 the business volume has barely grown by 4% -which is the lowest start of the year from Pandemia -, in contrast to the estimated 8%, from now on Inditex will not be able to grow as much as it had accustomed the market.

Despite the reaction, the reality is that Inditex closed 2024 as a new record year with figures that have exceeded the forecasts billing 7.5% more and winning up to 5,886 million euros. The Galician reached sales in the last year of 38,632 million euros, which means, according to the company, it is an “very satisfactory evolution in both store and positive in all formats.” In 2021 the growth was 36%; in 2022 of 17.5% and 2023 of 10.4%.

In addition, the group has announced its intention to propose to the General Board of Shareholders an increase in 9% dividend for exercise 2025, up to 1.68 euros per share, composed of an ordinary dividend of 1.13 euros and an extraordinary dividend of 0.55 euro per share.

Analysts maintain confidence

After a fourth quarter “Skull”, Bankinter analysts highlight a 2025 start in which the deceleration of textile group sales is a reality. “The beginning of the year shows a loss of traction“They comment before adding that, despite the” robustness “of the business model, the fall of the volumes and the investment commitment of 2.7 billion euros” will moderate the generation of Cash Flow Free. “

“The macroeconomic environment continues to present challenges. Customs tensions and global uncertainties can generate pressures, although we consider that Inditex’s structure, with its global diversification and its efficient operational management, makes it resilient to these factors,” the senior analyst of Etoro markets, Javier Molina, additionally projects it.

On the other hand, in Banco Sabadell and even with the weakness of the evolution of the business on the table, they value a “A certain improvement” of the gross margin of 20 basic points to 54% and reiterate their recommendation to ‘overpone’.

Since Deutsche Bank, for the moment, they have not modified their recommendation for the updated value a few days ago. With a stock market revaluation of 150% since 2022, the group has been a clear “outperformer”, as indicated, while placing its objective price in the 52 euros and recommends ‘maintain’ the title. However, experts clarify that “to a large extent, the data suggests that growth is slowing down and that The heat of the brand is fading“

Globally and according to the market consensus of Bloomberg, Somewhat less than half of the 31 analysis houses that cover the evolution of Inditex in the stock market, committed to ‘buy’ the value. Santander Bank experts are some of the most optimistic with respect to their potential stock market: they project a possible value increase up to 59.3 euros, that is, 31.2% more. JP Morgan also places the target price above the 50 euros zone per title just like Goldman Sachs analysts, Banco Sabadell or Bernstein.

Business pressure in the US

Today, those of Arteixo have their concentrated efforts, among other things, in the implementation of their expansion strategy in the United States where, if succeeding, it could be an important boost for the current management tandem composed of the non -executive presidency of Marta Ortega and the management of the CEO, Óscar García Maceiras.

The evolution of the business in the American country will be one of the conditions from now on on the margins of the business due to the need to undertake investments in the region to accelerate its growth. Thus, Bestinver Securities experts warn, complementaryly, “difficult to predict” uncertainties for Inditex as the possible reentry in Russia – if the war with Ukraine comes to its end – or the impact of the tariff war of the US administration of Donald Trump against Europe, China and the rest of North America countries: Canada and Mexico.

Investment in Logistics: Growth lever?

Also, from Bloomberg Intelligence They showed some concern for the Spanish group’s investment strategy after increased “significantly” capital spending with about 900 million euros for logistics in the last two years. “This raises pressure to accelerate sales growth and maintain profitability,” they say. “This will allow you to gain efficiency,” says Brun although he warns: “In the next quarters you can lower consumption, but Inditex still has growth levers.”

With everything and with it, the Trea Asset Management Variable Income, Xavier Brun, insists that Inditex is “in a Very good position regarding its competitionespecially, H&M “, as well as the Sales Operation Analyst of IG, Diego Morín, for whom the Spanish group” still has some solid fundamental. “

And although the commitment to rapid reaction capacity against growing problems and for its fashion strategy has been positive until now for the evolution of the business, in the face of the need for automation and cost control in the coming years “They will be key,” according to the opinion of the experts of Bloomberg Intelligence, as well as the return of investment in logistics.