OCADO shares were boosted yesterday after broker Goldman Sachs upgraded its rating on the shares.
The stock has fallen by almost a quarter since 11 February, when Goldman – Ocado’s house broker – placed ten per cent of the company’s shares at 265p each.
Goldman raised its rating on the online delivery company from “hold” to “buy”, with an unchanged price target of 304p yesterday.
Ocado’s shares surged after the upgrade, closing 7.4 per cent higher at 215.8p. Goldman said: “We retain our view that Ocado’s differentiated business model (proprietary centralised, semi-automated distribution and delivery network) results in a superior customer offering relative to other UK online grocers (e.g. more flexible delivery slots, higher order accuracy), hence, the company is well placed to deliver strong growth.”
Earlier this month the John Lewis Pension fund sold its stake in the online retailer – sending its share price down. The sale came as Waitrose revealed it was working on expanding its delivery service within the M25, with some analysts concluding that Ocado would be hit by the competition. Ocado floated last year at 180p per share and dipped below that before rallying.