Barclays upgraded Industria de Diseño Textil, S.A. (Inditex) to overweight from equal weight.
The bank raised its price target for the fashion retailer to 62.5 euros.
This new valuation represents an increase from the previous target of 56 euros.
The target suggests a potential upside of approximately 14.8% from the July 24 closing price.
Inditex shares climbed as much as 3.3% in intraday trading following the upgrade.
Analysts believe the market has been too cautious about the company's ability to protect profit margins.
Barclays identified efficient inventory management and the capacity to pass on costs as core strengths.
The bank also noted the company's effective control over operating expenses.