Morgan Stanley | One of the main calls of our retail analyst Geoff Ruddell (and outside the consensus) is to short Inditex.
There is no doubt that Inditex is a high quality and well-managed business with an impressive track record. However, this is all already in the price and with stores in countries which represent 95% of global GDP, it has already reached its maturity point and its capacity for growth seems very limited. In addition, it is affected by the same risks as the rest of its industry, lack of fashion trends, increase in competition, pressure of online sales.
On the other hand, the recent accounting changes in the company related to the capitalisation of IT costs, the extension of the useful life of its assets, impairment of provisions etc suppose an additional risk for Inditex, which it appears that investors are not taking into account. A good time, therefore, to meet our analyst.
