This is an extract from an interesting article in Bloomberg. The article makes the value point, i.e. the group is undervalued, valuing it at E22 per share, but predicts that the news CEo will possibly break up the Group.
Even after a decade of mostly stagnant sales in France, the retailer’s main market and neighboring countries are worth about 7.50 euros a share, Espirito Santo analysts say. At yesterday’s closing price of 13.68 euros, that would mean investors are getting the region for free as Carrefour’s non-European operations are worth 14.50 euros a share, the analysts estimate.
New Chief Executive Officer Georges Plassat, 63, has to boost profitability in Europe where margins are the lowest in at least a decade and set to worsen as shoppers shun Carrefour’s hypermarkets. If he can’t, the calls for Plassat to spin off the grocer’s business in Asia and Latin America may get louder, even from investors who are clinging to their growth prospects as the stock hovers at the lowest since 1994. Plassat faces shareholders for the first time at the June 18 annual meeting.
The stock price “has now fallen to a level where Carrefour’s third CEO in eight years can create shareholder value,” Caroline Gulliver, an analyst at Espirito Santo, wrote June 11. If Plassat fails in Europe, “then we expect he will be under increasing pressure to create shareholder value through a breakup of the group. Ideally, in our minds, he would do both.”
Even after a decade of mostly stagnant sales in France, the retailer’s main market and neighboring countries are worth about 7.50 euros a share, Espirito Santo analysts say. At yesterday’s closing price of 13.68 euros, that would mean investors are getting the region for free as Carrefour’s non-European operations are worth 14.50 euros a share, the analysts estimate.
New Chief Executive Officer Georges Plassat, 63, has to boost profitability in Europe where margins are the lowest in at least a decade and set to worsen as shoppers shun Carrefour’s hypermarkets. If he can’t, the calls for Plassat to spin off the grocer’s business in Asia and Latin America may get louder, even from investors who are clinging to their growth prospects as the stock hovers at the lowest since 1994. Plassat faces shareholders for the first time at the June 18 annual meeting.
The stock price “has now fallen to a level where Carrefour’s third CEO in eight years can create shareholder value,” Caroline Gulliver, an analyst at Espirito Santo, wrote June 11. If Plassat fails in Europe, “then we expect he will be under increasing pressure to create shareholder value through a breakup of the group. Ideally, in our minds, he would do both.”
No comments:
Post a Comment
Please leave me any comments. I look forward to replying.