Key Takeaways:
- Strong Performance: Inditex (ITX) reported remarkable sales growth across all concepts and geographies, with net income rising 9% in the first nine months of 2025.
- Price Projection: Despite the solid execution, our model suggests the stock may only reach €59 per share by January 2028.
- Expected Returns: This target implies a modest 2.6% annualized return from current levels, suggesting the stock is priced for perfection.
- Valuation Premium: The stock currently trades at a premium to historical averages, limiting the potential for further multiple expansion.
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Industria de Diseño Textil (ITX), the parent company of Zara, Bershka, and Massimo Dutti, has been a standout performer in the retail world.
The company recently reported strong results for the first nine months of 2025, with sales growing 6.2% in constant currency and reaching €28.2 billion.
Inditex continues to demonstrate the power of its unique business model, combining high fashion with rapid logistics. The company’s net income increased 9% to €4.6 billion, showcasing its ability to maintain profitability even in a complex market environment.
However, with the stock trading near all-time highs around €57, investors must ask if the growth story is already fully priced in.
See analysts’ full growth forecasts and estimates for Inditex stock (It’s free) >>>
What the Model Says for ITX Stock
We evaluated Inditex’s potential through 2028, balancing its strong operational performance against its premium current valuation.
Our model suggests limited upside from current levels. Using a forecast of 5.7% Revenue Growth (CAGR) and 20.3% Operating Margins, the model projects the stock could reach €59 by January 2028.
This implies a 2.6% annualized return over the next two years.
While Inditex is a high-quality company, it appears that the current valuation leaves little room for error, and returns may lag the broader market unless growth accelerates significantly.
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for ITX stock:
1. Revenue Growth (CAGR): 5.7%
The company is expanding its global footprint, with new store openings in markets like the U.S. (Charlotte, Las Vegas) and ongoing optimization of its online presence.
Management highlighted that sales growth was positive across all concepts and geographies in the first nine months of 2025. The company expects annual gross space growth of around 5% for the 2025-2026 period.
We forecast revenue growth of 5.7% through 2028, reflecting stable expansion and the company’s ability to maintain its market leadership.
2. Operating Margins: 20.3%
Despite currency headwinds, the company managed to expand its gross margin by 79 basis points in the third quarter. Operating expenses have been tightly controlled, growing just 3%, which is below sales growth.
The company is also leveraging new technologies and logistics investments (a €900 million per year plan) to drive further efficiencies.
We project operating margins to remain strong at 20.3%, supported by Inditex’s pricing power and disciplined cost management.
3. Exit P/E Multiple: 22.7x
Inditex currently trades at a forward P/E of roughly 27x. Historically, the stock has traded closer to 22.7x – 24.5x earnings.
Our model assumes a reversion to a 22.7x multiple by 2028.
This contraction in the valuation multiple creates a headwind for the stock price, offsetting some of the gains from earnings growth.
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What Happens If Things Go Better or Worse?
The outlook for Inditex depends heavily on its ability to maintain its premium valuation (these are estimates, not guaranteed returns):
- Low Case: If growth slows to 5.2% and the multiple compresses further, the stock could deliver a 1.1% annual return.
- Mid Case: If the company executes its growth plans and maintains healthy margins, we project a 6.3% annual return.
- High Case: If sales growth accelerates to 6.4% and the market sustains a higher multiple, returns could reach 10.9% annual return.
See what analysts think about ITX stock right now (Free with TIKR) >>>
How Much Upside Does Inditex Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
