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Analysts have weighed in and updated their coverage of Inditex after the Spanish fashion retailer pleased the markets with better than expected results on Wednesday. Analysts at Japanese brokerage firm Nomura have reiterated their 'neutral' rating while raising the price target to €92 from €86 per share. Kepler reiterated its 'buy' rating while more aggressively boosting its price target to €108 from €90. Banco Sabadell also has a 'buy' rating with a price target of €104.90. Analysts at the Spanish bank point out that the second quarter was even better than an excellent first quarter and that the third quarter has got off to a very good start with 17% sales growth at constant exchange rates. They believe that the good results will support the stock's outstanding performance. Analyst consensus estimates are expected to be raised. Banco Sabadell estimates a 2012 Price-to-Earnings (PER) ratio of 22, which it does not see as too high considering the 30% profit growth in the first half of the year.

Technical analysis: On to a new high? "Inditex shares continue to trade near their all-time high. The stock may be losing strength according to its recent performance but a new leg higher remains very likely," said technical analysts at Digital Look. "Over the last month, the stock offered some positive signals such as the breakout of resistance at €91.36 on September 6th. This left the stock without resistance. However, it surprised us by turning around on unusually high volume. The move took the stock back to the support level at €85. "Fortunately, the stock stayed away from that support level and moved above €90.76 again. We would not rule out a move towards €96.50 in the upcoming sessions, the all-time high. The breakout of that level would wipe out any remaining resistance and leave the stock free to take off." Market reaction Shares of Inditex have reacted to the earnings presentation with gains. Moments into Wednesday's trading session, Inditex was up 2.89% to €94.60 and approaching an all-time high.

The world's largest fashion retailer Inditex has again pleased the market with impressive results. The Spanish company reported profit growth of 32% for the first half-year, comfortably above the 26% expected by the market consensus. Net income totalled €944m on 17% sales growth to €7.24bn. Like-for-like sales rose 7% compared to the year-ago period. Earnings before income tax, depreciation, and amortisation (EBITDA) rose 29% in the first half-year to €1.62bn. Pre-tax earnings (EBIT) rose 35% to €1.24bn. The gross sales margin rose to 59.6% from 58.4%. Inditex opened 166 new stores in the period for a total of 5,693 stores in 85 markets. On September 5, the company launched online sales in China. In a conference call following the earnings presentation, company president Pablo Isla declared himself very satisfied by positive results that he attributed to the group's overall execution. He noted that business evolved positively at its 85 markets and that there continues to be global growth opportunities. Isla asserted that the company is in a strong financial position and pointed out that online sales for the Massimo Dutti and Zara Home brands will be launched in the United States this October.

Spanish fashion retailer Inditex has announced that it will not pass on the Spain's VAT-rate hike to its customers. The news come shortly after Prime Minister Mariano Rajoy explained that the general VAT rate would be raised from 18% to 21% as part of a barrage of measures announced by the government to save the struggling nation €65bn over the next two and a half years. "Inditex is maintaining its price stability policy which it used to absorb Spain's last VAT hike by identifying efficiencies in other parts of the business," the company said in a press release. This price policy extends to all of the group's retail chains, such as Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, and Uterque.