EUR 200.00 For Business Accounts Only

INDITEX: 4Q’22 RESULTS PREVIEW - NEW T.P. € 33.00/SH. (ANÁLISIS BANCO SABADELL)

4Q’22 results preview and new T.P. of € 33.00/sh. We maintain our BUY recommendation
We expect solid LfL sales performance in 4Q’22 (to be released on 15/03), rising around +13% in a quarter that improved as it progressed (strong start to Q4 and price increase) and which benefited from the impact of Omicron in 4Q’21. This will also contribute to EBIT growth (+39% in 4Q’22) and a higher EBIT margin (14.3% in 4Q’22e and ~17% in 2022e), despite the pressure on the gross margin (around -70bps in 4Q’22e or around -39bps in 2022e). The trading update (01 Feb - ~12 Mar) will be positive (although more moderate), and we expect the targets’23 to continue past trends (+/-50bps on the gross margin vs. around -25bps BS(e)). We raise our 2022-28e estimates by around +4% in sales and around +6% in EBIT due to the 2022 base effect, and we raise our T.P. to € 33.00/sh. (+14% vs. previous and +13% upside).