Ocado share price: Investors to eye update on potential M&S deal

Investors will await information about Ocado’s (LON:OCDO) possible deal with Marks & Spencer (LON:MKS) with the online grocer scheduled to post its full-year results tomorrow. The update will come after reports suggested last month that the two FTSE 100 companies were in talks over a potential delivery service.

Ocado’s share price has slipped into the red in London this morning and stood 0.38 percent lower at 987.60p as of 10:20 GMT. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.24 percent higher at 7,036.76 points. The group’s shares have added more than 90 percent to their value over the past year, as compared with about a 5.5-percent dip in the Footsie.

Investors eye results

Ocado is scheduled to update investors on its annual performance tomorrow and City A.M. reports that the group’s boss Tim Steiner will be in the spotlight following reports that the company was in talks with M&S about a possible food delivery service. The newswire quoted retail analyst Nick Bubb as commenting that the proposed deal was “clearly complicated and will take time to negotiate”, while noting that the results offered a deadline for Ocado bosses to provide some clarity.

The results will follow Ocado’s trading update in December when the online grocer reported that its retail revenue had climbed 12 percent to £390.7 million in the 13 weeks to December 2, in line with the group’s guidance for the year. 

Analyst ratings update

The 16 analysts offering 12-month price targets for Ocado for the Financial Times have a median target of 903.00p on the shares, with a high estimate of 1,700.00p and a low estimate of 460.00p. As of February 2, the consensus forecast amongst 19 polled investment analysts covering the blue-chip group has it that the company will outperform the market. 

As of 10:49 GMT, Monday, 04 February, Ocado Group PLC share price is 987.60p.