Five
companies drop in stature
Citigroup
ascertained that, without taking inflation and price evolution into account, the profit of the sector dropped 12% over the past decade. The group also expects
this negative trend to continue due to the economic crisis and the ever more
difficult macro-economic circumstances.
This is why
Citigroup lowered its advises for French Casino, British Sainsbury’s and German
Metro from “Neutral” to “Sell”. Belgian Delhaize and British Morrison dropped
from “Buy” to “Neutral”.
Shares take
hits
The consequences
were immediately visible on the trading floors: the share of Delhaize took a
hit of 4.55% (far worse than the -2.33% of the Bel20 in Brussels), while Casino
(-2.05%) also did worse than Parisian CAC40 (-1.71%). Even
Carrefour, with its unchanged advice (even though Citigroup is expecting an
organic growth below expectations), had to take a hit: the share of Carrefour
dropped 4.24% at the exchange in Paris.
The German
company Metro had its biggest loss in a single day for three months in
Frankfurt (-5.43%, while the DAX ‘only’ lost 1.24%). According to Citigroup the
explanation can be found in the growth slowdown in Russia, a region responsible
for a quarter of the operational cash flow of the company.
“Colruyt to
become leading distributor”
Some
distributors however will get better through the crisis than others, predict
the analysts of Citigroup. In that respect they are looking at Portuguese
retailer Jeronimo, British Cash & Carry group Booker and Dutch company
Ahold.
Colruyt
will also be part of that group: together with the three other companies, the
Belgian distributor should become part of a “small group of European leaders
within ten years”, says Citigroup. That however does not guarantee success on
the short term: Colruyt lost 2.92% yesterday – and Ahold lost even more with
4.16%.
