On Wednesday, HSBC maintained its buy recommendation and 22 euro price target on Carrefour, deeming the fall in the share price following Bercy's intervention in a dispute brought by franchisees to be exaggerated.

The broker recalls that the stock lost up to 10% yesterday after the Ministry of the Economy notified the retailer of certain grievances concerning the management of its franchisee network, which could result in a fine of 200 million euros.

In its note, the broker considers this amount "disproportionate" in view of the number of franchisees concerned, which would number between 30 and 50, or the equivalent of less than 100 stores.

It adds that the amount of the fine will ultimately be determined by the Commercial Court, and not by the Ministry of the Economy, and that Carrefour will have the option of appealing the decision, which would extend the procedure by three to five years.

We see the current share price as a new opportunity to strengthen our positions in this attractive business at a good price", he concludes.

HSBC points out that Carrefour is trading at a free cash flow (FCF) yield of 15% and at a discount of around 30% to its long-term historical average.

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