Equity Research on Carrefour S.A.

Details

Supervisors

Grégoire, Philippe

Faculty

Louvain School of Management

Degree label

Master [120] en sciences de gestion, à finalité spécialisée

Abstract

enThis thesis presents an equity research report on Carrefour S.A., one of the world’s largest food retail groups. The study is structured around three main chapters, a strategic analysis, a financial analysis and a valuation. The strategic analysis examines Carrefour’s multi-format and omnichannel business model, covering its physical store network, e-commerce operations, financial services, and its retail media joint venture Unlimitail. It further assesses the competitive landscape, the group’s positioning across its key geographies (France, Spain and Brazil) and the strategic roadmaps set out in the Carrefour 2026 and Carrefour 2030 plans, which focus on private label expansion, franchise development, and digital transformation. The financial analysis reviews five years of historical performance, highlighting moderate revenue growth (5-year CAGR of 3.1%), a declining gross margin, and a sharp drop in net income in 2025, partly driven by the disposal of Carrefour Italy and a one-off tax in France. Balance sheet and cash flow analyses confirm a stable financial structure, with improving cash generation but persistent pressure on profitability relative to peers. The valuation is conducted using two methodologies. A Discounted Cash Flow (DCF) model, built under base, worst-case, and best-case scenarios, yields a base-case intrinsic value of 67.84 euros per share, with a range of 35.43 to 74.70 euros. A relative valuation using a panel of 13 European food retailers reveals a significant discount of approximately 40% on the P/E ratio and 17% on the EV/EBITDA multiple compared to sector peers. The recommendation is to buy with a target price of 35 euros per share.