Shares of Carrefour SA (EPA:CARR) slipped on Friday after Jefferies downgraded the French supermarket operator to a "hold" rating from "buy" and lowered its price objective to €14 from €14.50. At the time of the report, Carrefour shares were trading at €13.92, leaving the new target with roughly 1% upside.
Jefferies pointed to a significant re-rating of Carrefour's stock - about 20% since mid-2025 - and attributed much of that move to market reaction to ongoing talks and actions around asset disposals rather than an improvement in the retailer's core operating outlook. The broker said the strategic review launched in February 2025 has produced tangible earnings-per-share benefits and a tighter geographic focus on France, Spain and Brazil, but argued that investors now appear to have priced in a substantial portion of those gains.
The bank detailed several specific actions that contributed to earnings accretion. Jefferies estimated the sale of the Italy business, a squeeze-out of minority shareholders in Brazil and the refinancing of Brazilian operations in euros collectively added about 20% to Carrefour's 2024 earnings base. In addition, press coverage about potential further disposals in markets such as Argentina, Poland, Romania and Belgium supported the share move, the analysts said.
Despite these portfolio adjustments and the associated earnings lift, Jefferies raised concerns about momentum in Carrefour's primary markets. The report noted that growth in French food retail sales and market share gains remained limited, with Carrefour finishing 2025 with low single-digit percentage growth in France. In Brazil, the brokerage highlighted a weak consumer environment and a slowdown in food retail expansion.
On the top-line outlook, Jefferies predicted group revenue of €86.78 billion for 2025, €86.59 billion for 2026 and €89.15 billion for 2027. The broker's earnings-per-share forecasts were €1.62 for 2025, €1.87 for 2026 and €2.02 for 2027. Jefferies said their projections for earnings before interest and tax are 2% to 4% below consensus for the 2025-2027 period.
From a valuation perspective, Jefferies noted that Carrefour currently trades at a reduced discount to European grocery peers compared with early 2025. The firm estimated the stock is priced at about 6.9x 2027 earnings, narrowing from a larger historical discount, and concluded the valuation is less attractive absent clearer signs of improving performance in the core markets.
The report cited Carrefour's market capitalisation at about €9.2 billion and a 52-week trading range between €11.58 and €15.14. With Jefferies' revised rating and price target, the broker signalled that potential upside is limited unless trading conditions in France and Brazil or other core markets show stronger improvement.
Key points
- Jefferies downgraded Carrefour from "buy" to "hold" and set a €14 price target, noting much of the strategic-review gains appear reflected in the share price.
- Actions such as the Italy disposal, a Brazil minority squeeze-out and euro refinancing of Brazilian operations contributed about 20% accretion to the 2024 earnings base.
- Jefferies forecasts revenues of €86.78bn in 2025, €86.59bn in 2026 and €89.15bn in 2027, with EPS of €1.62, €1.87 and €2.02 respectively, and sees valuation at roughly 6.9x 2027 earnings.
Risks and uncertainties
- Weak trading momentum in Carrefour's core markets - particularly limited sales growth and market share gains in France - could constrain revenue and margin expansion.
- A soft consumer backdrop and slowing food retail growth in Brazil may weigh on group performance and dilute the benefits from structural actions.
- Valuation now sits closer to peers; without clearer evidence of improving operations in core markets, the stock may offer limited upside, affecting investor returns in the retail and grocery sectors.