Beating the Recession: Why Carrefour is the Stock to Watch

Amidst the looming shadows of a recession, fund manager Sean Peche of Ranmore Fund Management has set his sights on an unlikely retail champion: French multinational Carrefour.Peche, the portfolio manager of the Ranmore Global Equity Fund, has emphasized Carrefour's defensive qualities and its potential to grow earnings even in the face of inflation. With a 31% return in 2023, the Ranmore Global Equity Fund has outperformed the S&P 500 index, and Carrefour is its second-largest holding.

Peche has highlighted Carrefour's impressive revenue growth, which has increased by 14.4% from 74.2 billion euros in 2018 to 84.9 billion euros in 2023. This growth, Peche explains, is due to Carrefour's technological advancements and inventory optimization through weather forecasting and AI.Trading at six times earnings with a 5% dividend yield, Carrefour boasts a great management team and is currently undervalued. Despite a 23% decline over the past 12 months due to investor interest in AI and technology stocks, Carrefour's growth opportunities remain promising. Peche points to the company's expanding advertising business, which allows brands to pay for prominent product placement on Carrefour's online platforms. Additionally, Carrefour's international operations, particularly in Brazil, show significant potential.While not all analysts share Peche's enthusiasm for Carrefour's near-term prospects, the consensus price target of 17.35 euros a share suggests a 25%5% upside potential.

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