The extreme demand of the market with Inditex shares has been revealed in the opening of the stock market. The textile giant has in the last quarter of its fiscal year, but the market sank 7.5% the company’s price on Wednesday. It is the greatest drop in exactly five years: on March 12, 2020 the value was left 10.5% in the face of the advance of the pandemic and the proximity of confinement. An hour after the opening, the Textile company had lost 13,000 million capitalization, a historical record in the Spanish Stock Exchange that, at the end it remained in a decrease of 11,375 million. However, the worst day for the company founded by Amancio Ortega, and a black day only surpassed by the losses of Santander in two sessions of January 2015 and June 2016. They are the only occasions, together with the Inditex itself after the results of three months ago, in which a value has lost more than 10,000 million in one day. Analysts explain that, despite the good results, the slowdown of sales expresses the difficulty of maintaining the rate of billing and margins, an expectation of growth that is the support of the action.
“The evolution of a company in the markets cannot be measured in the short term, but in the middle and length,” said the CEO, Oscar García Maceiras. “We are optimistic; We try to generate that long -term value making a constant investor effort. That is our focus, ”he added.
Inditex has won 1,420 million euros, just under the 1,450 provided by the consensus of analysts, according to the collection of estimates of Bloombergbut it has improved the expectations in sales (11,210 million compared to 11,150 planned), exploitation benefit (1,880 million Ebit compared to 1.810; 2,760 million Ebitda compared to 2,670 expected) and margins (16.8% net and 24.6% gross) in the quarter.
“The fundamentals and the business model remain very solid, but the value will reflect the deceleration in growth and difficulty to continue expanding margins at very high levels with historical perspective and in front of their competitors,” explain Bankinter analysts. In similar terms, rent 4 is expressed: “exceeds forecasts at the operational level thanks to an increase in the lower operating expenses than expected, but the start of the quarter shows a clear slowdown of sales, superior to the one we discounted.”
RBC, which maintains a recommendation of “worse than the market” because they consider that the value has exhausted its potential, also points out that recent activity is weaker than expected, particularly in the markets of Asia and America. The analysis firm, in any case, is skeptical with respect to the near future: “The sales base is broader and the margin has returned to its long -term average”, so it expects a moderation of the growth of the benefit per action in future quarters. In this same line Alphavalue expresses: “Billing is slowing down, which is not surprising taking into account the mediocre consumption environment. Although Inditex is still the best in the sector, its actions are too expensive and, for the moment, we would stay away from it. ”
From Jefferies they focus, on the contrary, in the short -term factors to explain a slip in current sales, “which will mark the debate” of the stock market. The acceleration in the last week, as the weather has normalized, suggests that the weather conditions were particularly complicated in the quarter. JP Morgan points out that the results were weaker than expected, but also highlights the positive figures of the last week of activity.
