Ocado Group PLC (LSE: OCDO)

Ocado Group PLC (LSE: OCDO) is an FTSE 100 index listed company that provides grocery fulfilment solutions to large grocery retailers. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock.

Investment Rationale – Watch at GBX 502.60

• Net Debt: OCDO’s net debt grew from £359.80 million at the end of FY21 to £577.10 million as of 30 November 2022.
• Increased Losses: The Company has widened its loss before tax from £176.90 million during FY21 to £500.80 million in FY22.
• Decline in Average Basket Size: The Company’s average basket size has witnessed a 7.5% YoY fall to 45 items during Q1 FY23.
• Victory in Autostore Proceedings: On 30 March 2023, OCDO updated that it has comprehensively won the patent infringement suit brought by AutoStore at the UK High Court.
• Macroeconomic Uncertainties: OCDO's performance is susceptible to inability to deliver expected acquisition synergies, economic recession, volatile equity markets, high levels of inflation, and rising interest rates.

Share Price Chart  

Conclusion

Based on the widened net losses, macroeconomic challenges, and increase in net debt, a "WATCH" recommendation on Ocado Group PLC has been given at the closing market price of GBX 502.60 (as of 13 April 2023).

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 13 April 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

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