Ocado Group prepares to unveil first half results with analysts forecasting revenue decline but improved earnings performance across key segments.
Ocado Group will issue its first-half (H1) results on Thursday, 17 July 2025, following a prior earnings per share (EPS) beat of 26.1pence (p) versus 31.3p expected. Analysts anticipate a similar H1 performance, with blended forecasts pointing to improvements in both revenue and operating metrics.
According to London Stock Exchange Group (LSEG) Data & Analytics, analysts are split with 3 ‘strong buy’, 3 ‘buy’, 4 ‘hold’, 4 ‘sell’, and 1 ‘strong sell’ rating for Ocado, with a mean long-term price target of 287p, 24% above the current share price (as of 16 July 2025).
Ocado has a TipRanks Smart Score of ‘1 Underperform’ and is rated as a ‘sell’ with 1 ‘buy’, 0 ‘hold’, and 2 ‘sell’ recommendations (as of 16 July 2025).
For fiscal year (FY) 2025, analysts expect Ocado Group to generate total group revenue in the £3.38 billion range. The second quarter (Q2) is likely to align with this trend, driven by the retail segment's steady momentum.
Measured growth in technology solutions continues to support overall revenue performance. The company's diversified business model provides stability across different market conditions and customer segments.
The retail partnership with Marks & Spencer (M&S) has proven successful, with customers responding positively to the enhanced product range and service quality improvements implemented throughout the collaboration.
The logistics segment should deliver mid- to high-single-digit revenue increases, compounded by margin pressure from higher operating costs. This segment continues to benefit from increased demand for automated fulfilment solutions.
Technology solutions will be under the spotlight, particularly since FY 2025 growth guidance has been trimmed to around 10%, down from 18.9% in the prior year. Investors will look closely at commentary on the timing of the next few fulfilment centre launches.
North American expansion remains a key focus area, including Kroger sites where implementation remains gradual. The pace of international rollouts directly impacts the company's long-term growth trajectory and market penetration strategies.
Shares in technology-focused retailers like Ocado sometimes reflect investor sentiment about automation trends and digital transformation in retail sectors globally.
Analyst consensus forecasts robust FY 2025 earnings before interest, taxes, depreciation, and amortisation (EBITDA) around £212 million. Markets will scrutinise signs of progression towards Ocado's target of free cash flow positivity by 2026.
Cost reduction initiatives, including approximately 500 research and development (R&D) job cuts, demonstrate management's commitment to operational efficiency. These measures should contribute to improved margin performance across the business.
Any incremental margin improvement within tech or logistics would signal meaningful progress towards profitability targets. The company's technology platform investments are beginning to show returns through improved operational efficiency.
Free cash flow generation remains the ultimate measure of business success. Investors are particularly focused on the realistic pathway to achieving positive free cash flow by 2026 as previously guided.
Despite improving sentiment by some analysts, JPMorgan recently upgraded Ocado to overweight, critical execution risks remain around technology implementation and international expansion. The company must deliver on ambitious growth targets while managing operational complexities.
The Ocado share price remains in a long- to medium-term downtrend and is seen sliding towards its major 226.1p to 222.1p support zone, which contains the March and June lows.
Were the 226.1p to 222.1p support area to give way, the June 2006 low at 203p and the psychological 200p region may be reached.
For the short-term technical picture to become bullish, the Ocado share price needs to rise above its current July high at 247.1p. If so, it would also break through its April-to-July downtrend line and open the way for the mid-June high at 267.8p to be revisited.
Other potential upside targets in such a bullish reversal scenario are the late May 282.5p high, followed by the 200-day simple moving average (SMA) at 295.4p and the psychological 300p region.
Trading in Ocado shares requires careful attention to both fundamental developments and technical chart patterns, particularly around results announcements.
Are technology launches in North America progressing on schedule, or slipping? The timing of international expansion directly impacts revenue growth and market share gains in competitive markets.
Is the path to break-even free cash flow in 2026 still realistic? Management commentary on cost reduction progress and margin improvement will be crucial for maintaining investor confidence.
Can retail sustain earnings growth in partnership with M&S, and offset pressures elsewhere? The retail segment's performance increasingly supports overall group profitability and strategic positioning.
Technology solutions commentary will be particularly important given the revised growth guidance. Investors need clarity on customer pipeline development and implementation timelines for major contracts.
Share trading around earnings requires careful risk management, particularly given Ocado's history of volatile post-results price movements.
Contract for difference (CFD) trading allows investors to gain exposure to Ocado's results without full capital commitment, suitable for those seeking short-term trading opportunities.
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