Banking giant Goldman Sachs has slashed its price target for its house stock Ocado PLC (LON:OCDO).
Goldman still maintains its ‘buy’ recommendation for the online supermarket but cut its share price forecasts by more than 35% to 450p (from 615p).
Ocado shares have plummeted by more than 15% this week after it highlighted competition pressures in its latest quarterly update.
Chief executive Tim Steiner said: "As the market remains very competitive, we are seeing sustained and continuing margin pressure and there is nothing to suggest this will change in the short term.”
In the update, Ocado also failed to announce any long-awaited technology tie-ups with other retailers, a move which has come under criticism from analysts.
Hargreaves Lansdown equity analyst George Salmon said: "At present, despite providing a fantastic service and growing the top line strongly, Ocado makes relatively little money.
"This means more deals are needed in order to justify the shares’ lofty valuation. Steiner remains confident, but investors will be anxious to see if he can woo another partner, and indeed when.”
Goldman Sachs added that an “announcement of any Smart Platform partner would be a catalyst”.
Shares continued to struggle on Friday, dipping a further 2.2p, or 1%, to 270.7p.