Ocado share price rallies as Citi lifts valuation

on Jun 21, 2019
Updated: Mar 11, 2020
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Ocado’s share price (LON:OCDO) has surged in London this Friday as Citi lifted its valuation on the online grocer. The analysts have further reaffirmed their bullish stance on the company.

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As of 15:01 BST, Ocado’s share price had gained 5.62 percent to 1,164.50p, outperforming the broader UK market, with the benchmark FTSE 100 index having fallen marginally into the red and currently standing 0.14 percent lower at 7,414.13 points. The online grocer’s shares have added more than 11 percent to their value over the past year, as compared with a near two-percent fall in the Footsie.

Citi still bullish on Ocado

Citi reaffirmed Ocado as a ‘buy’ today, further lifting its price target on the shares from 1,300p to 1,450p.

“We reiterate our buy rating with our view that Ocado leads in a global online grocery market experiencing secular and structural growth,” the broker pointed out, as quoted by Sharecast, adding that the advent of the online grocer’s Zoom immediacy solution, which designed to deliver groceries to customers within a one-hour window, “significantly increases its addressable market, with the opportunity for greater automation (notably outbound robopicking) underpinning its long term economics”.

Today’s update comes after Ocado recently made a £17-million investment into the emerging ‘vertical farming’ industry, having formed a joint venture called Infinite Acres with vertical farming participants 80 Acres Farms and Priva Holding, and having snapped up a 28-percent stake in Jones Food Company, Europe’s largest operating vertical farm.

Other analysts on group

The 13 analysts offering 12-month targets for the Ocado share price for the Financial Times have a median target of 1,000.00p, with a high estimate of 1,700.00p and a low estimate of 600.00p. As of June 20, the consensus forecast amongst 17 polled investment analysts covering the blue-chip group has it that the company will outperform the market.

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