Financial Storm: J.P. Morgan Declares Carrefour a Critical Risk
Parijs, donderdag, 26 juni 2025.
J.P. Morgan has issued a sharp warning for Carrefour by placing the retail giant on the negative watchlist. The most alarming indication is the expected decline of operating profit by 8% and profit outlook dropping by 11% in the 2025-2027 period. The analysis reveals critical challenges in core markets of France, Europe, and Latin America, with declining profit margins, increasing financial costs, and a weakening cash flow position. The sharp downward adjustment of the price target from €10 to €9 underscores the severity of financial concerns surrounding Carrefour, with potential broader implications for the European retail sector.
Financial Decline in Retail Sector
J.P. Morgan dealt Carrefour a heavy financial blow on Thursday by placing the company on the negative watchlist. The bank expects a substantial decline in operating profit of 8 percent and a drop in earnings per share of 11 percent in the 2025-2027 period [1][2].
Geographical Challenges
The financial analysis reveals critical challenges in Carrefour’s core markets. In France, an EBIT decline of 13.3% is expected, despite a net revenue growth of 9.3%. Europe shows persistent weakness with an expected EBIT decline of 12.8% on flat revenue. Even Latin America, previously a growth engine, is impacted with an expected revenue decline of 7.2% and EBIT fall of 10.8% [1].
Financial Core Metrics
The financial situation is deteriorating on multiple fronts. Net financial expenses have risen from €410 million to €759 million. The debt position has increased, with the net debt/EBITDA ratio rising from 2.0x in 2024 to 2.2x in 2025. Free cash flow is also under pressure, declining by 74 percent on an underlying basis [1].
Price Target and Outlook
J.P. Morgan has lowered the price target for Carrefour from €10 to €9, implying a downside potential of 30% compared to the closing price of €12.75 on 25 June. The bank maintains an ‘underweight’ rating and considers the investment case as ‘fundamentally compromised’ [1][2].