(Bloomberg) -- Inditex SA shares rose to the highest since the retailer’s 2001 initial public offering as analysts turn increasingly optimistic ahead of third-quarter results.
The Zara owner closed up 1.5% at €36.88 in Madrid trading on Tuesday, extending its year-to-date gain to about 50%.
The retailer’s fast-fashion business model and online presence have helped the shares best a retail sector that is this year’s top performer in Europe. The Stoxx Europe 600 Retail Index is up 26% in 2023 as customers have hit the shops following pandemic-era lockdowns.
Inditex is due to announce results on Dec. 13, with analysts expecting the Spanish company to report 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 of unseasonably warm weather and adverse currency movements.
“Inditex continues to outperform and gain market share, led by the company’s continued widening moat and differentiation across product and store experience relative to peers,” Smalley wrote in a note, raising her bull and bear case targets on the stock, but leaving her €38 price target unchanged.
--With assistance from James Cone and Thyagaraju Adinarayan.
(Updates with closing share price in second paragraph)
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