Ahold Outperforms Again in 4Q, but Stock Offers Little Upside; Carrefour, Delhaize Better Values

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Ahold slightly undershot our revenue forecast in the fourth quarter, but robust same-store sales figures give us confidence in our 2011 projections and suggest our thesis--that Ahold's shrewd capital allocation should allow it to outperform its peers in the near term--remains intact. We are reiterating our fair value estimate, which implies limited upside to the stock.

After adjusting for exchange rates and an extra week in 2009, fourth-quarter 2010 net sales increased 5.5%. The company's domestic market of the Netherlands together with the Czech Republic and Slovakia were the key drivers, with identical sales growing 4.0% in these markets. The U.S. segment, which represented 80% of total net sales in the fourth quarter, was slightly less positive, with identical sales up 1.9%, or 0.9% excluding gasoline.