CARREFOUR : Company contact: key takeaways

研报英文原文证据摘录

CARREFOUR : Company contact: key takeaways

Refinitiv

Investment case, valuation and risks

Carrefour (Underperform, Target Price EUR12)

Investment case

We see Carrefour as the most structurally challenged asset in our coverage, with

limited market leading positions and a competitor set in many markets that is largely

discounters/franchise operators with lower cost structures, taking share through lower

prices. While management has done well to take cost out of the business this has not

translated into material profit growth. While we see upside from the current strategic

review, we see limited room for re-rating, with the stock looking more than fully valued

on DACF to EV valuation. We also see CA struggling to make FY26 FCF guidance.

Valuation methodology

We value Carrefour using DCF methodology. We use a WACC of 11.5% and a terminal

growth rate of 1%.

Risks

To the upside:

A stronger than expected margin recovery driven by self-help and more benign

conditions in Carrefour's key geographies are the key upside risks. There is also potential

for a tailwind from the currency as well as stronger consumption growth. Market share

momentum in France, possibly through lower prices post its recent acquisition,

translating into profitable growth is a key upside risk. Estimate upgrades are particularly

important upside risks to Carrefour as the EV is so large relative to its market cap. We

also see CA struggling to make FY26 FCF guidance.

To the downside:

Further downside risk could come through an escalation in price competition in France

if growth remains pressured; a deterioration in Brazilian trading conditions in the face of

higher interest rates and any further acquisitions in the hypermarket space which