How high can the Ocado share price possibly go?
Ocado shares have rallied 42% since mid-March after the stock saw revenue growth double amid panic buying due to the coronavirus pandemic.
Ocado shares have rallied 42% since mid-March after the company saw revenue growth double amid panic buying due to the coronavirus pandemic.
In its first quarter (Q1), the online retailer saw revenue growth double, with consumers opting to stockpile food in reaction to the Covid-19 outbreak and subsequent nationwide lockdown.
‘The impact of higher basket values and order demand, amid growing public concern over the coronavirus, was limited in the quarter, although this has since picked up significantly and growth in the second quarter is so far double that of the first quarter,’ the company said in a statement.
The company said that Q1 revenue increased by 10.3% to £441.2m, with sales spiking so much that the retailer was forced to temporarily shut down its online store and stop taking new customer registrations due to ‘unprecedent strain’ on the business.
Ocado did also mention that it expects ‘the impact of forward buying, however, to unwind at some point’.
Ocado is trading at £15.44 a share as of 13:35 (GMT) on Wednesday.
Bernstein reiterates ‘outperform’ rating for Ocado
Analysts at Bernstein remain optimistic about Ocado’s share price trajectory, with the US-based brokerage reiterating its ‘outperform’ rating for the stock in March and upgrading its target price to £17 a share.
Based on Ocado trading at £15.44 a share, analysts at Bernstein believe the stock has a potential upside of 10.1%.
Analysts at JP Morgan also upgraded their rating for the stock from ‘neutral’ to ‘underweight’. But despite improving their price target for Ocado to £14 a share, it implies the share price will fall in value by 9.3%.
How to trade retail stocks with IG
Create an IG Trading Account or log in to your existing account
Enter ‘OCADO’ in the search bar and select it
Choose your position size
Click on ‘buy’ or ‘sell’ in the deal ticket
Confirm the trade
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
React to global volatility
Market volatility continues as coronavirus concerns amplify. Trade with IG and take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and only incur a fee when triggered
- Round-the-clock assistance – our highly skilled team are available when you need support
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.