PARIS (Reuters) - Shares in Carrefour rose sharply on Monday as investors welcomed the French retailer’s move to finally give up control of its loss-making Chinese business in a deal that analysts said would underpin its earnings and valuation.
By 0703 GMT, Carrefour shares were up 2.5 percent at 17.44 euros, among the top gainers on France’s blue-chip CAC-40 index.
“We expect 3-4 percent earnings upgrades from the removal of the China losses and lower interest rates. In terms of our ‘Sum of the Part’, it would add 0.7 euros/share, or 4 percent on the last closing price,” said analysts at brokerage Bernstein.
Carrefour on Sunday became the latest Western retailer to announce a retreat from the Chinese market as fierce competition from domestic rivals and a growing online market puts pressure on foreign firms.
Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta