In key news on UK stocks, Ocado Group (GB:OCDO) is under pressure from its shareholders to exit its London listing and move to New York. According to the Sunday Telegraph, the company’s top shareholder has requested it to explore the idea in detail. There are also reports about various discussions that have taken place with investors to evaluate the possible shifting of the listing. OCDO shares were up more than 4% as of writing.
Ocado Group is a technology-driven company recognized globally for its expertise in software and robotics platforms.
Pressure Mounts on Ocado
The rising pressure stems from Ocado’s sluggish share performance over the last few years. Ocado stock has declined by almost 90% from its record high in 2021. The stock rallied during the pandemic as more and more customers shifted to online shopping. The company’s market capitalization has plunged to around £3 billion from £22 billion in September 2020.
Ocado already has a strong presence in the U.S., with six fulfillment centers. Shareholders believe that a possible U.S. listing could generate a premium compared to a London listing due to the company’s technology-focused business.
The news also came as another blow to the already struggling UK stock market, as more and more companies are contemplating moving to the U.S. for potentially better valuations. Recently, reports of energy giant Shell’s (GB:SHEL) potential departure from the UK market emerged as a looming threat to the stability of the London Stock Exchange (LSE).
Ocado Group also has a joint venture, Ocado Retail, with Marks and Spencer PLC (GB:MKS). Experts believe that this could come up as a hurdle in moving to the U.S. Last month, the company released a Q1 2024 trading update for Ocado Retail, highlighting its robust performance, with an 8.1% year-over-year surge in volumes and a 10.6% uptick in retail revenue. This growth was driven by the notable increase in active customers, which rose by 6.4% to reach 1.02 million by the end of the quarter.
Are Ocado Shares a Good Buy?
According to TipRanks’ analyst consensus, OCDO stock has received a Moderate Sell rating based on four Sells, three Holds, and one Buy. The Ocado share price forecast is 531.37p, which is 47% above the current price level.
