Deutsche Bank upgrades Inditex rating based on growth prospects

LootboxPhobia · 2026-03-05T14:02:57+00:00

Deutsche Bank upgrades the stock rating of Industria de Diseno Textil SA from Hold to Buy and raises the target price from €53 to €63, expecting sales to grow by approximately 9% in 2026, earnings per share to increase by 12%, and an estimated return on investment of about 15%. The institution considers Inditex a top-tier retailer with cash generation capabilities recovering.

LootboxPhobia

2026-03-05 14:02:57

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Investing.com - Deutsche Bank upgraded Industria de Diseno Textil SA (BME:ITX) stock from Hold to Buy on Thursday, raising the target price from €53 to €63, citing the company’s reasonable pricing and differentiated growth.

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Deutsche Bank forecasts that, despite the company’s sales base reaching €40 billion, sales growth at fixed exchange rates is about 9% for the 2026 calendar year, with a compound annual growth rate (CAGR) of 8% from 2026 to 2028.

The firm expects the same period’s earnings per share (EPS) to grow at a CAGR of approximately 11%.

For the 2026 calendar year, Deutsche Bank expects EPS to increase by about 12%, with an approximate 3.5% dividend yield, offering investors a total shareholder return of around 15%.

The firm believes that the low comparables in Q1, with a growth rate of 4%, and Q3, with 8%, should support the growth momentum.

Deutsche Bank has slightly raised its forecasts for fiscal years 2027-2028 by about 1%, making its predictions roughly 4-6% higher than market consensus. Currency translation remains a headwind, and macro events in the Middle East are causing short-term volatility, with sales in the region accounting for a low single-digit percentage.

The firm considers Inditex a top-tier retailer, with sales growth and profit delivery aligned, and as a period of special capital expenditures ends, cash generation is recovering strongly.

A discounted cash flow (DCF) analysis yields a target price of €63, implying a forward P/E ratio of 28x for the 2026 calendar year, with nearly 20% upside.

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