Ocado shares are listed on the main market of the London Stock Exchange under the ticker symbol OCDO. Its stock was until recently a constituent of the FTSE 100 index, but it has since dropped into the FTSE 250.
Ocado Group, often shortened to Ocado, is a British company established in 2000 that licenses its grocery technology. To the general population, Ocado is mostly known as an online grocery retailer. However, it is primarily a technology-led software and robotics platform business.
Ocado Group’s technology includes automated warehouse systems and efficient delivery logistics, allowing traditional grocers to compete more effectively in the online market.
Ocado.com is its UK grocery retail business, a 50/50 joint venture with Marks & Spencer. Ocado’s retail arm is also responsible for Ocado Zoom, its same-day grocery service.
YOUR CAPITAL IS AT RISK
Ocado EPS and Revenue Breakdown 2020-2023
| OCDO | Annual EPS | Annual Revenue |
|---|---|---|
| 2020 | -19p | £2.33 billion |
| 2021 | -30p | £2.50 billion |
| 2022 | -59p | £2.52 billion |
| 2023 | -38p | £2.83 billion |
UK Supermarket Industry Comparison
Ocado Share Price & Dividend Yield
The Ocado share price surged between 2017 and 2020, rising to over 2,800p per share. However, since then, it’s been downhill, with the stock trading below the 400p per share mark. The valuation drop has even fuelled speculation that the company could look to move its listing to New York.
P/E Ratio Average Over the Last Ten Years: -8.8x (source: Finbox)
Ocado Share Price Forecast
Overall, the analyst view on Ocado is split, with five assigning the stock a Buy rating, four assigning it a Hold rating and five a Sell rating
A View From The Bulls: In May, Deutsche Bank initiated Ocado Group with a Buy rating and a 660p per share price target. The investment bank said it is enthused by the opportunity Ocado’s solutions can offer to its grocery partners, given the continued shift to online grocery shopping.
A View From The Bears: In March, RBC Capital cut the firm’s price target on Ocado Group to 420p from 500p, maintaining an Underperform rating on the stock. The banks said they “expect the solid momentum of Ocado Retail to continue, supported by its ongoing investment in prices/proposition.” However, the firm’s analysts continue to see “risks to consensus estimates for its Technology Solutions segment.” They added that there is a “reduced likelihood of further game-changing grocery deals.”
In October 2023, Barclays downgraded Ocado Group to Underweight from Equal Weight with a new price target of 430p, down from 680p. The bank said its deep dive into the company’s Tech Solutions unit pointed to Ocado missing medium-term guidance. As a result, they saw more downside risk over the following 12 months.
Average Analyst Consensus 12-Month Price Target: 541.6p
Our View: At the time of writing (May 30, 2024), the Ocado share price has been significantly pressured. It is currently the second most-shorted London-listed stock. While there is a potentially fruitful opportunity for long-term growth, investors should first understand the current company headwinds.
Who Might Buy Ocado Shares
Ocado’s stock presents a unique opportunity, but it won’t be ideal for everyone. Here’s a breakdown of investors who might find Ocado appealing:
Ocado operates in the rapidly growing online grocery and grocery technology markets. Investors with a higher risk tolerance who are looking for potential for significant capital appreciation, in the long run, may find Ocado attractive.
The London-listed company has faced recent challenges, and its share price has experienced volatility. Investors comfortable with some short-term fluctuations and a longer-term investment horizon may be a good fit.
The company’s core value lies in its innovative technology solutions for the grocery sector. Investors who believe in the future of online grocery and the potential of Ocado’s technology platform may want to take a closer look at Ocado.
Some investors may view Ocado’s current share price as an opportunity if they believe the company can overcome its challenges and achieve future profitability.
Ocado does not pay dividends, so investors seeking dividend income may want to look elsewhere.
