EUR 100.00 For Business Accounts Only

INDITEX: 1Q'23 RESULTS PREVIEW. NEW T.P. € 34.50/SH. (ANÁLISIS BANCO SABADELL)

1Q’23 results preview and new T.P. of € 34.50/sh. We maintain our BUY recommendation
We expect positive LfL sales performance (results to be released on 07/06) of around +12.5% in a quarter of declining performance (strong start to Q1, number of stores, price increases and solid demand). Despite the higher costs (around -30bps on the gross margin) and a less favourable sales mix, EBIT will grow around +5% vs. 1Q’22 adjusted for the Russia/Ukraine provisions, around +27% on the reported level, bringing the margin to 17.5%. We also expect a positive (although more moderate) trading update (01 May- around 05 June), and we do not expect any changes to the 2023 targets. We raise our sales estimates to a CAGR’22-28e of around +5% and more than +6% in EBIT (vs. the previous +5%) and place our T.P. at € 34.50/sh. (+5% vs. previous and +10% upside).