Ocado rallies as Exane upgrades to 'neutral', says shares are fair value
Ocado was on the front foot, bucking the overall trend after Exane BNP Paribas upgraded the stock to ‘neutral’ from ‘underperform’ and lifted its price target to 325p from 260p following the pullback in the share price.
Food & Drug Retailers
3,682.87
17:14 18/04/24
FTSE 250
19,450.67
17:14 18/04/24
FTSE 350
4,334.00
17:14 18/04/24
FTSE All-Share
4,290.02
16:54 18/04/24
Ocado Group
350.00p
16:35 18/04/24
“We take a deep dive on Ocado’s international potential, revisit the UK business, and conclude that, after a pull-back, the shares are broadly fair, not compelling value,” said Exane.
It said that with around £1.5bn of retailer sales already priced-in, investors shouldn’t chase the shares. The bank said it’s more sanguine on the UK and the scope for Ocado to ‘merge’ its online offer with Waitrose in time.
Exane said risks to the upside primarily relate to the signing of multiple deals with large retailers. On the downside, delays in striking international deals or only signing with a small operator would weigh on the shares, it said.
As for the UK, a deal with Waitrose would be positive, whereas Amazon Fresh’s entry to the UK could cause more concern than justified.
At 1215 BST, Ocado shares were up 3.7% at 355.60p.