LONDON (Reuters) - Shares in Zara fashion chain owner Inditex fell more than 7 percent to a three-year low on Friday after JP Morgan cut its price target for the company weeks before it is due to report annual results.
Inditex, due to report on March 14, will hold a conference call with financial analysts later on Friday, according to traders. Inditex could not immediately confirm whether it planned to hold such a call.
JPMorgan said it was cutting its price target to 35.5 euros from 38 euros and its forecasts by 5 percent due to negative foreign exchange effects. It said it believed sales slowed in the second half of the fourth quarter.
Inditex was trading 7.7 percent lower by 1240 GMT at 24.78 euros, a three-year low.
Inditex had no immediate comment. Spain’s market regulator declined to comment.
Inditex reports in euros but makes around half of its sales in other currencies, meaning the fluctuations of the euro against a basket of dozens of other currencies affects earnings.
Many of the Asian and Latin American currencies are dollar-linked meaning a strong euro and weak dollar negatively impact results at the world’s biggest clothes retailer.
The euro has risen 2.5 percent against the dollar since the beginning of the year.
Reporting by Alasdair Pal, Gdynia newsroom, Madrid newsroom; Writing by Sonya Dowsett; editing by Tom Pfeiffer/Keith Weir