Morgan Stanley upgrades Inditex to 'overweight' on resilience amid tough retail backdrop
BUZZ-Morgan Stanley upgrades Inditex to 'overweight' on resilience amid tough retail backdrop ** Morgan Stanley raises Inditex to "overweight" from "equal-weight" and sees resilience with a steady growth formula amidst a tough consumer discretionary backdrop
** It forecasts about an 8% annual growth in Inditex sales over the next three years while the industry faces a soft European consumer sentiment and increased margin cost headwinds from the Middle East conflict
** The broker expects tougher shopping conditions to separate the strong from the weak, with Inditex likely to come out ahead
** Morgan Stanley added that the company's results this Wednesday provided incremental evidence of this increased bifurcation
** MS also says the growing trend on "wellness" and the use of weight‑loss drugs could lead to more demand for clothes because people may need new wardrobes if their body size changes, although it's still early to measure
** Out of 30 analysts that cover Inditex, 23 rate the stock "strong buy" or "buy, "six rate "hold" and one rates the stock "sell" - LSEG data
(Reporting by Gemma Guasch in Gdansk)
((Gemma.Guasch@thomsonreuters.com; +48 58 746 90 08;))