The decision of European Central Bank (ECB) lowering interest rates by a quarter of a point and placing the price of money at 4.25% will accelerate the drop in profitability that banks offer for fixed term deposits, which in Spain is around 2.49% on average. In this scenario, analysts recommend small savers who want to obtain more returns for their capital to invest in Actions of large growing and profitable Spanish companiesas long as your risk profile allows it.
Among these values, analysts highlight three: InditexBanco Santander and Iberdrolabacked by its results this year and its high growth potential.
The company founded by Amancio Ortega obtained in the first quarter of its fiscal year, which runs from February to April, a record profit of 1,249 million of euros, which represents a 10.8% more than in the same period of the previous year, in which it also set a record by achieving profits of 1,168 million, 54% more than a year before.
“The results presented by Inditex this year have been very solidconfirming the strength of its business model in a complicated environment. The market has coincided with this appreciation and there is the rise that its shares have experienced since last Wednesday,” he indicates. Antonio CasteloiBroker analyst.
Javier Cabreraan XTB analyst, also considers that Inditex is “a great company”, since “it continues to be able to improve its operational efficiency and offer customers the products they really demand. This makes us think that it continues to have a strong competitive advantage, which makes it a very attractive company to invest in. Especially for retailers, since its business model is simple and easily verifiable.”
From the figures presented by the Galician fashion distribution giant, Castelo highlights “the maintenance of margin around 60%/61%. Also the evolution of net cash, which continues to improve, the control of the growth of operating costs, (they increased by only 6.4%) and the generation of free cash flow, which remains robust. In his opinion, “Their business model is so advanced and so flexible, “which allows rapid adaptation to customer demands.”
All this makes it a good option for those who want invest long termdue, according to Castelo, to the fact that “not in vain It is the most capitalized value on the Spanish stock market and since it began trading in 2021, its trend is clearly bullish”.
Cabrera agrees that Inditex is “without a doubt, a value to bet on in the long term”. He recognizes that it will go through periods of lower growth due to the cyclicality of the sector, but “its ability to generate above-average returns on invested capital makes it a company to bet on in the long term.” It stands out that its wide Operating marginof around 20%, will allow you to continue generating profits in the most difficult periods and gain market share.
At this point, Castelo points out that “although It is a value that we like very muchperhaps, at this time I would be in favor of wait for a cutperhaps at levels of 43/44 euros, to enter. If the investor already has a position and is in, it is best to continue in value”.
Regarding the stock’s forecasts for the year as a whole, the iBroker analyst points out that the current quarter “has started well, with sales increasing by 12%”. All of this allows the company to continue remunerating its shareholders well. He has announced that his dividend will increase by 28% compared to last year and between the ordinary and extraordinary years it will reach 1.54 euros per share.
Inditex is not the only value indicated for retailers, analysts also highlight the action of Santander Bank and of Iberdrola. The group chaired by Ana Botín closed the first quarter of the year with a profit of 2,852 million of euros, which meant a 10.9% more than in the same period of 2023 and its highest profits at the beginning of the year.
For him set of 2024the bank expects a mid-single digit revenue growth, an efficiency ratio below 43%, that the cost of credit remains at 1.2% and a RoTE -ratio that measures financial profitability- of 16%.
According to him analyst consensus that FactSet collects, the target price Santander’s share average stands at 5.23 euroswhich would mean a revaluation potential of 14.69%. At the close of the markets today, Monday, Santander’s share was trading at 4,711 euros.
Regarding investment in banking, in general, Antonio Castelo points out that “we continue to like them, including Santander.” Analysts also like him. Jefferieswho advise ‘buy‘ the value, with a target price of 5.10 euros. Their “results are solid“, with “good income dynamics, particularly in Spain.”
Also the technicians of Bankinter They recommend buying the stock. They argue that “the increase in the interest margin offsets inflation and the effort in provisions.” They indicate that “the most important thing about the results” is that the metrics management of the group as a whole “They are good with Recurring Revenues, Efficiency and Profitability/RoTE, and there is no significant deterioration in the credit quality indices and the 2024 guidance remains the same”.
Iberdrola It is another of the values that, in the opinion of analysts, can be profitable for investors. retail investors. One of the assets of the value is its first quarter profits, which reached 2,760 million euros, which represented a increase of 85.8% compared to the 1,485 million in the same period of 2023, driven by the capital gains obtained after the sale of assets in Mexico. Without that operation, its net profit would have increased by 27%.
Their forecasts until the end of the year are upwards and predicts a net profit of more than 5,000 million, with which I would achieve a new record historic due to “the strong operating performance, the contribution of investments and the contribution of the new regulatory frameworks in the network business.”
For Aránzazu Well, Bankinter analyst, Iberdrola results, “may improve throughout the year“, therefore recommends buy the value and gives two arguments. The first is that it is a “clear winner” in the process of Greater electrification and rapid decarbonization that the new energy model faces. “Its positioning in renewables and networks, geographical diversification and a solid financial structure allows it to capture opportunities,” explains Bueno.
Another reason is its change towards a business profile with more visibility and less volatile. On the one hand, the analyst emphasizes that “the majority of future investments are directed at the network business, which is subject to predictable regulatory frameworks” and, on the other hand, “in the generation business, long-term contracts are increasing so as not to depend on the volatility of the markets,” he concludes.
