EUR 100.00 For Business Accounts Only

INDITEX: 1Q’22 RESULTS PREVIEW AND T.P. CUT (ANÁLISIS BANCO SABADELL)

1Q’22 Results Preview and T.P. Cut to € 27.70/sh. We maintain our BUY recommendation.
We expect a robust sales performance in the 1Q’22 (08/06), with~+28% on a quarter that would see a decreasing performance (reopenings in the 1Q’21, halt of operations in Russia/Ukraine and China’s restrictions) with a ~+5% price rise. This will allow the company to keep the gross margin practically stable (around -10bps) and ~+78% EBIT growth. The trading update (May/7-June) will be positive (although more moderate), and we expect the company to confirm its 2022 targets. We raise our estimates’22/27e by +4% and +7% in sales and EBIT, respectively, setting our T.P. at € 27.70/sh. (+24% upside and around -4% vs. previous) due to lower recurring growth. We maintain our BUY recommendation, as the stock is pricing in nil sales growth’22/27e, which is not reasonable given its business model.