ANALYSIS-Carrefour cost cuts buy time, answers still needed

* Cost savings plan could deliver big boost to earnings

* Risk over execution; benefits may need to be re-invested

* Plan for turnaround at hypermarkets still needed

* Carrefour shares already at a premium to some rivals

By Mark Potter and James Regan

LONDON/PARIS, July 1 (Reuters) - Carrefour's (CARR.PA) huge 4.5-billion-euro ($6.3 billion) savings programme buys Europe's No.1 retailer time to turn itself around, but investors may want more details on strategy before pushing the shares much higher.

The French group, hit hard in the recession by its exposure to weak western European markets and a reliance on discretionary non-food ranges, reported promising results from a string of new initiatives at an analyst day on Tuesday.

These included a discount range of products, revamped convenience and discount stores, and a move to a single banner name across its hypermarkets and supermarkets.

But Carrefour also announced a third profit warning in 12 months, due largely to the cost of cutting prices, and said it still hadn't come up with a blueprint for its troubled hypermarkets, underscoring the size of the task ahead.

"While the potential profit upside is exciting, investors are still being asked to take a lot on trust," Execution analysts said in a research note.

With Carrefour shares already trading at about 13.5 times forecast earnings -- above French rival Casino (CASP.PA) on 10.3 and Britain's Tesco on 11.9, according to Reuters data -- they advise against giving the firm the benefit of the doubt.

Carrefour shares, which have lagged the DJ STOXX European retail index .SXRP by about 5 percent over the past year, leapt as much as 5.7 percent to 32.14 euros on Wednesday as investors welcomed the bigger-than-expected savings plan.

The group, which employs around 490,000 people in more than 15,000 stores in 30 countries, said it would cut costs by 2.1 billion euros by 2012 and save 1 billion euros by improving purchasing terms in its main western European markets of France, Spain, Belgium and Italy. It also plans to save 1.4 billion euros by cutting inventory times by a week. [nLU887161]

The plan, from new Chief Executive Lars Olofsson, who took the helm on Jan. 1, is bigger than most analysts hoped for and dazzled some.

"The cultural shift within Carrefour is self-evident and the potential efficiency gains are so material that we believe the presentation should continue to sustain hopes of a meaningful recovery," said UBS's Matthew Taylor, who estimates the boost to operating profit in 2012 could reach 1.1 billion euros.