Online supermarket Ocado is down 20% in its worst fall in 11 years
Ocado lost a fifth of its value yesterday in the biggest sell-off in more than a decade.
In a brutal day for investors, the shares fell 19.9 per cent, or 160.6p, to 647.8p after a leading analyst reiterated his negative view.
The slump has reduced the online supermarket group’s value by almost £1.4bn – £32m less than co-founder and chief executive Tim Steiner’s shareholding.
The plunge, the biggest in 11 years, followed a note from BNP Paribas Exane analyst Andrew Gwynn downgrading the stock’s outlook.
Ocado was among the lockdown winners and its share price hit a record 2895p in September 2020. However, in June this year it fell as low as 343p.
Crash: In a brutal day for investors, Ocado shares fell 19.9%, or 160.6p, to 647.8p after a leading analyst reiterated his negative view
The stock has recovered in recent weeks and was trading above 800p before yesterday’s sell-off.
In his note, Gwynn downgraded his recommendation to “Underperform” from “Neutral,” explaining that the recent rally has thrown the risk-reward trade off “unbalanced.” The note added that the stock “now appears to be out of balance again.”
Ocado had a strong start to the week, with positive feedback from analysts at Jefferies and JP Morgan, as well as positive results from its online shopping joint venture with Marks & Spencer.
Ocado Retail’s report on Tuesday showed that customers again bought more goods after a series of price cuts won back middle class shoppers.
Sales in the three months to August 27 were 7.2 percent higher at £569.6 million than 12 months earlier.