UPDATE 2-Retailer Casino's profit outlook hits shares

* Shares drop, analysts say 2018 guidance cautious

* 2017 operating profit 1.242 bln euros, up 20.1 pct

* French 2017 operating profit 556 mln euros, up 9.4 pct (Adds share reaction, analyst comments, details)

PARIS, March 8 (Reuters) - Retailer Casino delivered a cautious profit outlook along with its 2017 results on Thursday, at a time when it is under pressure to show it can revive profits in its main market of France.

Casino, whose credit rating was cut to junk by Standard & Poor's in March 2016, is also experiencing slower growth in Brazil, its second-biggest market by revenue.

Its shares fell 4.7 percent by 0949 GMT after Casino vowed to grow profits in 2018 with the help of cost savings as it posted a 20.1 percent jump in its 2017 operating profit, which included tax credits in Brazil.

For 2018, Casino said it aimed to deliver organic growth in consolidated operating profit for the group above 10 percent, excluding tax credits.

"The outlook, whose encrypted translation is not very easy at first sight, seems rather cautious. Forex headwinds should not be neglected in 2018, so we do not see much room for EPS upgrade," said Bryan Garnier analysts, who kept a "neutral" rating on the stock which is hovering near its lowest level since December 2016.

Barclays analysts also pointed to a rise in 2017 net debt as a concern.

Casino, which has stepped up its online offerings in recent months in the face of competition from Amazon, said it would benefit from a deal to use British online retailer Ocado's E-commerce platform to expand its business.

It kept its 2017 dividend unchanged at 3.12 euros and vowed to improve cash flow and cut its net debt this year thanks to asset sales, notably Brazilian appliance and electronics unit Via Varejo which it has put up for sale.

Casino also said that its French operations had shown signs of improvement, with profits at its main French arm rising to 556 million euros in 2017 against 508 million euros in 2016 - in line with Casino's guidance for profits above 550 million euros.

Casino faces tough competition with the French market, but the company said it was targeting organic growth in France of above 10 percent in operating profit for 2018, excluding real estate activities.

In recession-hit Brazil, where Casino controls retailer Grupo Pao de Acucar (GPA), the group's performance has been helped by its cash-and-carry Assai format, which has proven popular with customers in that country.

Casino shares, which rose 10.9 percent in 2017, have fallen around nearly 20 percent so far in 2018, underperforming their European sector.

($1 = 0.8060 euros) (Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta and Elaine Hardcastle)