The purpose of valuating the Spanish multinational apparel retailer Inditex company is to present an investment recommendation report for owners, potential buyers and other stakeholders an assessment of a target share price for Inditex and aim to provide an investment recommendation its associated share price, compared to the market value. the methodology of the valuation approach was the enterprise Discounted Cash Flow (DCF) model

Introduction

Inditex is a global fashion the Parent of a global group of companies present in 5 continents, in both hemispheres, north and south. Inditex is listed on all the four Spanish stock exchanges. Its main activity consists of offering latest fashion trends (apparel, footwear, accessories and home textiles) with high quality and sustainability standards, at attractive prices and inspired in customer requirements. In 1985, Goasam was gathered under a holding company named Industria de Diseño Textil S.A. (Inditex). The accurate and responsive business model resulted in large growth for Inditex in Spain, and in 1988 they started expanding internationally by opening their first foreign store in Portugal. In the following years, Inditex would expand further, opening stores in 29 countries on three continents (Europe, America and Asia) during the 1990’s. Inditex would not only expand geographically. In the 1990’s, they launched four new brands, Pull & Bear, Massimo Dutti, Bershka and Stradivarius. Later in the 2000’s, three additional brands were launched, Oysho, Zara Home and Uterqüe. By introducing these brands, Inditex could target more design and sourcing teams to accurately anticipate our customers’ needs. Inditex shares closed at 30.37 euros per share on 31 January 2020, 24.7% higher than last financial year. The average daily trading volume was approximately 6.1 million shares in the year to that date. In the same period, the Dow Jones Stoxx 600 Retail rose by 17% while the Ibex 35 gained 3%. Inditex’s market cap stood at 94.653 billion euros at the end of the period, up 933% on 23 May 2001, when its shares were admitted to trading, while the Ibex 35 fell by 3% in the same period.