Ocado share price set to climb even higher ahead of its Q1 earnings

The British online grocery delivery platform is well-positioned to see its shares climb even further as sales surge amid Covid-19, and global retailer interest in its tech platform grows ahead of its half-year results.

Ocado is well-positioned to see its shares climb even further, with sales surging amid Covid-19 and interest in its tech platform rising from global retailers ahead of its half-year results next week.

The growth potential of its tech platform has helped the company exceed nearly all analysts’ expectations, with the stock up 61% year-to-date. Ocado closed at £20.31 per share on Friday.

The online grocery delivery platform will unveil its half-year results on Tuesday 14 July.

From September 2020, Ocado will end its 20-year partnership with Waitrose and enter a new relationship with Marks & Spencer, after the retailer acquired half of its grocery business in a deal valued at around £750 million.

Covid-19 has made online demand for groceries skyrocket, with the new joint venture with M&S capable of reaping major rewards for both parties if executed correctly and able pushing Ocado’s stock higher in the fourth quarter of 2020 to become one of the UK’s top tech stocks.

Licensing key to Ocado’s growth

Outside of Ocado’s joint venture deal with M&S and, arguably the key driver of its share price gains in 2020, is its digital grocery platform which it licenses several leading supermarkets from around the world, assisting them with their online sales, storage and distribution. This includes Morrisons in the UK, Groupe Casino in France, ICA in Sweden, Coles in Australia, Kroger in the US, Sobeys in Canada and Aeon in Japan.

Although it is still early days for Ocado’s tech business. The company still generates three times more revenue from its online grocery operation than its tech division, and it’s still loss-making overall.

Despite this, Ocado is becoming a vital partner for major retailers looking to automate and digitise their businesses and has plenty of room to grow considering its tech can be used by more industries than just groceries.

UK supermarkets sees online sales surge during lockdown

According to a recent report by Kantar, online grocery sales surged in the 12 weeks to 14 June, with the coronavirus pandemic accelerating a shift in shopping habits.

British supermarkets saw take-home sales increase by 13.7% year-on-year over the 12 week period, with revenue growth soaring 18.9% over the last four weeks.

‘Consumers are also contemplating their domestic budgets,’ Fraser McKevitt, head of retail and consumer insight at Kantar said.

‘Two thirds of shoppers are very concerned about the economic outlook for the rest of 2020, and efforts to tighten purse strings can already be seen in a preference among furloughed workers for budget, own-label lines and a move away from more premium products.’

Tesco had the highest market share of the multiples during the 12 weeks to 14 June, at 26.9%, compared to 27.3% a year earlier. Sainsbury's had a market share of 14.9%, Asda 13.9% and Morrisons 10.1%. Meanwhile, Aldi's market share was 7.5%, Waitrose was 4.8% and Iceland was 2.5%.

How to trade stocks with IG

Looking to trade Ocado and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs and spread bets in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Ocado’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

See opportunity on a stock?

Don’t miss your chance. Try a risk-free trade in your demo account, and find out whether your hunch could have paid off.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance. Upgrade to a live account to take advantage.

  • Trade a wide range of popular global stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform, when it matters

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Sell
Buy
-
-
China 300
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.