Carrefour Brasil has made its debut on the BOVESPA Brazilian Stock Exchange with a market value superior to that of its main competitor, Grupo Pão de Açúcar, according to reports.
With a share price of R$ 15 (€4.09) in the initial IPO, the retailer started trading at a market value of around R$ 29.7 billion (€8.11 billion), ahead of rival Grupo Pão de Açúcar (GPA), which is valued at R$ 17.2 billion (€4.69 billion).
Carrefour Brasil's shares have a strong potential for appreciation and its retail operations have higher profit margins than those of GPA, reports daily O Globo.
When the share value and the projected annual profit is taken into account, Carrefour’s multiple is 19 times, compared to GPA whose multiple is 32.1 times.
Since 2014, Carrefour Brasil has held a market-leading in the country's food segment, with an 11.8% market share, compared to second-placed GPA with 10.8%. This has been achieved mainly due to the success of its cash and carry format, which accounts for 64% of the retailer’s total revenues.
UBS analysts point out that both Carrefour and GPA should have similar growth rates in the medium term, although Carrefour has made larger payments to its shareholders due to lower expenses.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine