Ocado’s share price (LON:OCDO) has surged in London in today’s session as the company made an investment in the ‘vertical farming’ industry. The news came after the online grocer recently announced a joint venture with Marks & Spencer Group (LON:MKS).
As of 14:52 BST, Ocado’s share price had added 3.73 percent to 1,154.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.44 percent higher at 7,364.25 points. The group’s shares have added more than 15 percent to their value over the past year, as compared with about a four-percent drop in the Footsie.
Ocado share price up
Shares in Ocado have advanced as it emerged that the company is investing £17 million into the emerging ‘vertical farming’ industry. Reuters reported that the company had formed a joint venture called Infinite Acres with vertical farming participants 80 Acres Farms and Priva Holding, with each holding a third of the equity. The company has further acquired a 28-percent stake in Jones Food Company (JFC), Europe’s largest operating vertical farm, which is based in Scunthorpe, northern England.
Proactive Investors quoted Numis, which rates Ocado as a ‘buy,’ as commenting that advancements in robotics and LED lighting are improving the economics within what is a relatively nascent industry.
“These investments present an opportunity for Ocado to leverage its technologies in a related industry whilst building expertise in vertical farming with a view to co-locating facilities with CFCs,” the broker pointed out.
Analyst ratings update
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 3, the consensus forecast amongst 17 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.