Analyst Luke Holbrook from Morgan Stanley maintained a Sell rating on Ocado Group (OCDGF – Research Report) and keeping the price target at p230.00.
Luke Holbrook has given his Sell rating due to a combination of factors impacting Ocado Group’s outlook. One significant reason is the recent earnings call from Kroger, which indicated no immediate plans to expand their Customer Fulfillment Centers (CFCs). This lack of urgency in opening new CFCs suggests a slower growth trajectory for Ocado’s partnership with Kroger, which is a crucial component of Ocado’s business strategy.
Additionally, Ocado’s recent results revealed that the go-live dates for Kroger’s CFCs have been postponed to fiscal year 2026. This delay is partly due to Kroger’s decision to utilize Ocado’s in-house freezer technology instead of third-party solutions, which pushes back expected revenue streams. The market has already reacted negatively to these developments, as evidenced by a significant drop in Ocado’s share price, reflecting weakened investor sentiment. These factors combined have led Luke Holbrook to conclude that Ocado’s stock is currently overvalued, justifying a Sell recommendation.
In another report released on March 5, Barclays also maintained a Sell rating on the stock with a £2.60 price target.