- Trading back at lowest spot in 15 years, 7.7x P/E (43% disc. to peers) and 7.7% dividend yield (peers 3.5%)
- Price competitiveness improving in France, where consumer trends align with 4Q24's strong organic growth
- 6M 110% IV at 3YPc8 – an attractive opportunity to add delta given the low price and depressed valuation
We revisit our previous trade idea, Carrefour – Long Dec25 14 Calls – Depressed valuation hard to ignore, as Carrefour’s share price is now back at our initial entry point and our original thesis on the name still stands
At its 1Q25 results, the company reported LFL sales growth of 2.9%, surpassing consensus estimates of 2.2%, driven by a strong performance in hyperinflationary Argentina, partially offset by minor but sequentially improving underperformances in France and Europe. FY25 guidance was unchanged, anticipating slight growth in EBITDA, ROI and net FCF. The key points following the analyst call were that the strategic review is advancing; and while France's market remains competitive, Carrefour's price competitiveness has strengthened with consumer trends aligned with 4Q24's strong organic performance
Spot is now trading back at its lowest level in 15 years, and with 6M 110% IV at 3YPc8, it remains very attractive to add delta via a limited loss structure. We propose Dec25 14 calls at a net cost of 3.5% of underlying (Spot ref: 12.93, Fut. 13.07).