Online grocer Ocado Group Plc (LON:OCDO) is among the few marks in the diary for Tuesday, the third trading day since the Brexit vote.
Pressure from Amazon’s entry to grocery delivery and concerns about the group’s market valuation are among the issues that have weighed on the share, but, the interims are due to follow up positive financials from the first quarter.
In the first quarter sales climbed around 14%, and the group reported a £7mln profit.
“Progress was driven by growing order numbers, with the average order size continuing to decline as the effect of food price deflation plays through,” said Numis analyst Andrew Wade.
“Elsewhere, and as expected, there was no news at that time on other developments, including the Morrisons agreement (new terms agreed in principle), Andover (opening ‘shortly’), and any international deals.
“Since then, we have seen a number of important developments, including what looks like the first deliveries from the new Andover CFC following the closure of the Marchwood spoke on June 14th, and the launch of Amazon Fresh – our extensive price comparison showed Amazon Fresh averages 8% cheaper per item than Ocado, but 3% more expensive per item when shopping promotions.”
Wade added: “We continue to believe that central fulfilment is the best model (efficiency, customer-benefits, operationally) and that Ocado has the leading global solution; while the lack of deal announcement and broader investor concerns around competition have weighed on the shares, we retain our positive stance.”
Numis rates Ocado as a ‘buy’ with a 500p price target, suggesting some 140% upside to the current price of 207.5p.