UniCredit Maintains its HOLD Rating on Carrefour

October 05 00:00 2011

NEW YORK, 5 October (RainbowNewsLine.com) – Analysts at UniCredit Bank maintain their “HOLD” rating on Carrefour (CARR.PA). The target price is set to €19.

Carrefour is expected to release its 3Q sales figures by 13’Oct before the market opens. According to the analysts at UniCredit, the 3Q sales are projected at EUR22.7 billion or +0.2% yoy. The spot price of Carrefour as on 4 Oct 2011 stood at €16.7 and the expected price is marked at €19. In last 12 months it has touched the highs of €36.06 and lows of €17.41, with cost of equity at 7.7%.

The analyst has maintained their HOLD opinion on the shares of Carrefour, given the following factors. Since last summer, Carrefour has targeted quantifying the price investments because France seemed lifeless with poor results coming from hypermarkets (-3.5% Ifl) and integrated stores (-5 % Ifl). In other European countries, Belgium showed promise like before, Spain maintained a stable hold while Poland faced difficulties and ended up with -3% Ifl. LatAm is based in Brazil, it displayed outstanding results with €4,020 million sales for 3Q10, and expected to outperform with € 4,347 million by 3Q, 2011. The declaration of ‘reset’ strategy in France does not provide much encouragement. If Carrefour could prove the sustainability of its price investment in France then the stock can see much awaited movement, the analysts say.

According to the analysts, the reset of French Business may cause a negative impact on the projected statements for 2011. The sales in 2010 stood at €90,099 million, and expected to drop to €82,330 million in 2011 but will rise gradually in the forthcoming years. EPS for Fy11 is expected to be -€0.28. The projected results provided by the analyst at Unicredit for 2012 and 2013 shows promise as sales, reported EPS and Dividend Yield seems to be improving with time.