RBC Capital Markets has opened coverage on four leading European food retailers, preferring Carrefour and Jerónimo Martins to Ahold Delhaize and Colruyt Group. The research house assigned "outperform" ratings to Carrefour and Jerónimo Martins, while Ahold Delhaize and Colruyt Group received "sector perform" ratings.
Carrefour
For Carrefour, RBC set a price target of c22, attributing the recommendation to what it described as a more disciplined, operationally streamlined and profit-focused strategy. The broker pointed to sharper price positioning and growth initiatives in France, Spain and Brazil as core strengths.
RBC modeled a double-digit free cash flow yield for Carrefour this year, along with a 1.5 percentage point inflection in return on capital employed and roughly 55 basis points of margin expansion by 2028. The firm noted Carrefour's target of reaching 25% market share in France by 2030, up from approximately 22% at present, and said the Concordis buying alliance with Coop rative U and Germany's RTG Group should help that effort.
On capital allocation, RBC modeled special dividends totalling 0.69 per share distributed over three years, and projected leverage to decline to around 1.7 times this year. The c22 price target is the average of a discounted cash flow value of c24 and a sum-of-the-parts valuation of c19.
Jer nimo Martins
RBC also assigned a c22 target to Jer nimo Martins, saying the company appears to be managing effectively despite a more challenging growth outlook for its Polish chain, Biedronka.
A broker-conducted survey of 300 Polish consumers placed Biedronka first for value for money and product range, with Lidl a close second. RBC modeled 2.8% like-for-like sales growth for Biedronka this year and anticipated approximately 8% space growth in Poland over three years, along with continued expansion in Slovakia.
RBC forecast an 8.2% EBITDA margin for Biedronka by fiscal 2028. The research note observed that Jer nimo Martins' shares trade at about 13 times 2026 estimated earnings, which the broker described as roughly a 30% discount to the company's historical average. The c22 target reflects an average of a DCF value of c25 and a sum-of-the-parts value of c20.
Ahold Delhaize
RBC's c38 target for Ahold Delhaize reflects its view of the business as a high-quality European food retailer that is cash generative, has a solid balance sheet and maintains healthy margins. At the same time, the broker expects investments in customer offers to constrain the operating margin to around 4% in the near term.
RBC surveyed 300 U.S. consumers and identified product range and store standards as areas for improvement at Food Lion. The firm noted Ahold's public plan to invest $1 billion in U.S. price initiatives over four years under a strategy called "Growing Together," which targets 4% sales growth.
On returns, RBC forecast a free cash flow yield of 7%-8% for Ahold Delhaize and highlighted that the company has returned more than c10 billion to shareholders over five years.
Colruyt Group
RBC's c37 target for Colruyt reflects a view that the current valuation is fair. The broker cited an estimated loss of about 200 basis points of Belgian market share over five years, which it tied to regulatory changes that have advantaged franchise competitors' Sunday trading.
RBC expects Colruyt to maintain a margin just above 4%, helped by its Vasco International Trading buying alliance with Superunie and Coop Group, automation efforts and vertical integration. The broker modeled a 1% compound annual topline growth rate between fiscal 2026 and fiscal 2029 and an 8%-9% free cash flow yield.
Overall preference and rationale
Across the four retailers, RBC said it prefers Carrefour and Jer nimo Martins, citing more attractive PEG ratios and clearer margin and expansion opportunities. The broker's analysis combined valuation techniques, including discounted cash flow and sum-of-the-parts approaches, with consumer survey data and modeled operational metrics such as margin trajectories, free cash flow yields and leverage targets.
Note: Coverage conclusions, price targets, modeled growth and margin figures, survey results and all other numerical and qualitative items reported here reflect RBC Capital Markets' published research as summarized in this article.