The share price of the FTSE 100 constituent Ocado Group (GB:OCDO) fell by around 20% yesterday after analysts predicted further downside in the share price. Analysts at UBS have maintained a neutral stance on the stock, predicting a downside of 28%, while BNP Paribas Exane downgraded its rating on the stock to Sell.
The stock gained over 5% in today’s trading session at the time of writing.
Ocado Group’s stock emerged as a winner during the lockdown, when the price soared to a record level above 2,800p in 2020 but dropped to around 300p in June 2023. Over the last two months, the stock again showed strong growth, crossing the 900p mark before this sharp decline. The shares have gained around 18.3% in trading over the last three months. In July, investors cheered the company’s half-yearly earnings report for FY23, which led to a remarkable surge in shares. In the first half of FY23, the company successfully transitioned to underlying profits of £16.6 million from the loss of £13.6 million recorded in H1 2022.
Ocado Group is a renowned global technology-driven company known for its expertise in software and robotics platforms. The company provides a unique and comprehensive end-to-end solution for online grocery services on a global scale.
Earlier this week, on Monday, the shares were leading the FTSE 100 index after Jefferies analyst Giles Thorne raised his price target on the stock to 750p from 550p. He also revised Ocado’s medium-term core profit margin estimates to 7%–8% for its retail segment. Moreover, it raised the forecast for sales capacity per module in its technology solutions division, now at £73 million compared to the previous £70 million.
On the contrary, Andrew Gwynn from BNP Paribas Exane believes the recent surge in the stock has led to an imbalance in the risk-reward ratio. He stated, “The stock seems now to be out of kilter again”.
What is the Price Target for Ocado Stock?
According to TipRanks’ analyst consensus, OCDO stock has received a Moderate Sell rating. The stock has two Hold and two Sell recommendations from analysts. The Ocado share price forecast is 523.8p, which is almost 23% lower than the current price level.