Analysts stress Inditex uncertainty: Marta Ortega still has to prove that she is the height of Pablo Isla. Inditex's decision to change the leadership of its leadership has shaken the market.

The board of directors of the textile company has appointed Marta Ortega as president of the firm based in Arteixo, replacing Pablo Isla. An appointment that will take effect on April 1, 2022, as reported by the company through a statement.

Meanwhile, Óscar García Maceiras, until now secretary general and of the board, will be the CEO of the group with immediate effect and will relieve Carlos Crespo, who had been in charge of the company founded by Amancio Ortega for 4 years.

Investors have punished this strategic shift since the opening of the trading session. In fact, stocks have been plummeting with the passage of the hours to fall more than 6.3%, below 28 euros, shortly before the close.

Analysts stress Inditex uncertainty

Why have investors been so skeptical about the change in leadership?

According to Darío García, an analyst at XTB, he believes that the news has caught shareholders by surprise, who " consider that the management of Isla is being adequate, and the numbers support him”.

Since Isla was appointed CEO, the company has been a pioneer in the efficient management of resources and investment in the online sales model within the sector. ” In addition, since he took the witness, the action has been revalued more than 830%, " says García.

” This spectacular behavior of the shares and the fall after the announcement indicates that the market is wary of what is to come, " Sara Carbonell, CEO of CMC Markets in Spain, explains.

” As much as this could be seen coming years ago, when Marta Ortega began to have a more important weight within the company, it is not that we investors distrust, but we have no record of having experience with respect to Pablo Isla, " emphasizes Carbonell.

Analysts stress Inditex uncertainty

In the opinion of Rafael Ojeda, macro analyst of Fortage Funds, this reaction of operators is due to the change "could not be understood“, because Isla has been the right hand of Amancio Ortega with a” great result“, placing it as”the first brand in its sector with an air of modernity".

"For example, in the subject of storage, logistics, the online part... Isla ahí has done a huge job in recent years; above all, adapting with great speed during the pandemic to the digital part. As a user, Inditex's change in technology is very noticeable, " says the CEO of CMC Markets in Spain.

The Fortage Funds analyst believes that the decision has been “surprising,” because he believes that the line that Marta Ortega is going to take will be “continuist.” That is, there will be no drastic changes in the way we work.

García adds in this regard that what investors value from this change is, at least, " to question the capacity of Marta Ortega as the next executive president of the firm.”

Analysts stress Inditex uncertainty

” Some comments this morning, question the decision as a ‘slap’ family business, but the reality is that Marta Ortega probably has been working on the brand practically since she has the legal capacity to do so, " says García.

Ojeda would go further in his analysis:”What many investors are discounting with the change is that Inditex is not a professional company and it is a patrimonial company of the Ortega family, and that is something they don't like."

According to Ramiro Martínez-Pardo, CEO of HeyTrade, to a certain extent, it is normal that “the market and analysts adopt a cautious position”.

"Pablo Isla has been a key figure for Inditex and his departure may lead to doubts about possible changes in strategy, although the succession was an expected change that had been brewing for years," says Martínez-Prado.

"In this way, Marta Ortega culminates the generational change of the company, having developed her role in different areas for 15 years and with the intention of maintaining the vision and executive lines of the group”, highlights the CEO of HeyTrade.

Analysts stress Inditex uncertainty

Apart from the new appointments, the key is the possible potential of Inditex on the stock exchange. Something that experts do not question at any time by the numbers in which the company moves.

” For me it has the capacity to grow regardless of the uncertainties of the pandemic, " says Carbonell. "The last results were very good, there was a lot of improvement and we saw how they adapted to the current challenges,” he adds.

The textile giant billed 6,994 million in the period, 1.2% more than in the same quarter of 2019. It turned out to be the best period in its history and hence experts consider that there may still be a way ahead.

"The potential? Only time will tell, but Marta has probably been working "in the shadow of the media and has taken more time than we think making key decisions within Inditex”, as García argues about the possibilities of value for the coming months with these changes.

Morningstar gives you a fair value of EUR 26.56, which is significantly below your current quote.

” Despite this data, the company I think can have potential in the markets, as long as the situation of the virus is not complicated, and also if they end up clearing the uncertainties about how the new management team will be", Carbonell concludes.