Paris, April 13 - Carrefour shares rose as much as 5 percent on Thursday after the world's second largest retailer surprised investors with better-than-expected sales growth in its competitive French main market.
Carrefour's French performance prompted brokers to raise their rating or price target for the stock, after Carrefour posted an 8.3 percent rise in total first-quarter sales to 20.4 billion euros ($24.82 billion) after Wednesday's market close.
Carrefour shares rose 3.4 percent to 44.46 euros by 0733 GMT. The stock hit its highest level in more than 2 years at 45.15 euros, while the DJ retail index added 0.9 percent. Carrefour shares have gained 12.6 percent this year.
It said it was on track to meet its target for higher sales growth this year than in 2005, which it has dubbed its turnaround year to deal with stiff rivalry in France where it generates about half of its sales.
ING raised its rating on Carrefour shares to "buy" from "hold", while JP Morgan raised the its recommendation to "overweight" from "neutral" and its price target to 50 euros from 40 euros. Oddo Securities raised its share price target to 51 euros from 48 euros while keeping its "buy" rating.
"First quarter sales included good surprises and some minor disappointments," ING said, citing good performance in France and satisfactory performance in Spain as well as poor sale in Italy and weakness in Europe.
In France sales rose 5 percent, also like-for-like, to 9.7 billion euros. Hypermarket sales there grew 4.3 percent, including one month's sales of its hypermarket franchisee Hyparlo which it bought out earlier this year. They rose 1.7 percent on a like-for-like basis and without petrol revenues.
Mixed growth performance in its international business, Europe -- excluding France -- would prove challenging, analysts said. Carrefour aims to boost the share of its international sales to diminish dependence on its home market.
"The glass is half empty," CM-CIC Securities said in a research note. The broker said international growth was well below its expectations, pointing out like-for-like sales fell 6.4 percent in Taiwan and 9.1 percent in Thailand.
Carrefour aims to be a top three player in countries where it is present or leave, such as in South Korea. Carrefour declined to comment on its South Korean store sale -- which analysts have valued at nearly $2 billion -- on Wednesday.
But a unit of Britain's Tesco and top South Korean retailer Lotte Shopping Co. have been picked as preferred bidders to buy Carrefour's Korean stores, the bidding companies said on Thursday.