Staple Retail equity research

Explore the most viewed and latest equity research and media content for companies within the Staple Retail sector. Stocks in this sector provide goods and services in the food wholesale and drug retail industries.

Staple Retail equity research

Explore the most viewed and latest equity research and media content for companies within the Staple Retail sector. Stocks in this sector provide goods and services in the food wholesale and drug retail industries.

Latest Content

Casino Guichard Perrachon

Moody's downgrades Casino

Moody’s has downgraded Casino’s credit rating from Ba1 negative outlook to Ba3 negative outlook. Subsequently, the company has released a note stating that Moody’s analysis is based on Casino’s gross debt at the end of 2018, which does not take into account either the asset disposal plan or the future reduction in bond debt. The French retailer has also specified that this development will have no impact on the availability or cost of the group’s financial resources – Casino in France has €5.0bn in liquidity, composed of a gross cash position of €2.1bn and confirmed credit lines of €2.9bn with an average maturity of 2.4 years. On a positive note, Moody’s has stated that the group is well positioned in convenience formats and online activities, and that it has the potential to generate new sources of revenues, particularly through its Greenyellow and 3W relevanC subsidiaries. In addition, Moody’s has also highlighted the group’s limited and decreasing exposure to the declining hypermarket format. Our view The concerns regarding high gross debt / financial expenses vs French free cash flows were also flagged by the market (the stock price slumped c.15% after the FY18 results last month). We continue to believe that the French gross debt (in turn, the financial expenses) will start coming down from H2 18. Moreover, the company should also witness cash inflows from non-core asset disposals (€1.0bn over the next 12 months), the majority of which should be used to reduce leverage further. Lastly, the incremental benefit from the 2019-21 strategy should also aid in improving the French free cash flows. For more details, please refer to our detailed report dated 25 March 2019. Although Casino’s share price has recovered slightly over the past few days, it might come under pressure today / in the short term. However, we maintain our positive stance and stock recommendation.

  • 03 Apr 19
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