Ocado Group PLC (LON:OCDO) received some heavyweight backing in the form of a ‘buy’ recommendation from a leading Wall Street bank.
Goldman Sachs reckons the grocery delivery business is worth 450p a share – meaning the stock would need to rise over 70% to hit that target.
“We believe Ocado is the best-placed grocer in our coverage to take advantage of, and drive, the channel shift to online grocery,” said analyst Rob Joyce in a note to clients.
“We expect its cost and capital advantages over traditional store-based grocers to drive widening top-line and operational performance, as well as improving profitability and cash generation.”
Goldman, which is the house broker to Ocado, is one of five ‘buyers’ of the stock logged by the Broker Forecasts site.
Four of Joyce’s fellow analysts hold ‘sell’ recommendations, while two think the stock is fully valued.
The consensus price target, which was 380p six months ago, currently stands at 321p.
At 9.15am the shares were changing hands for 259.35p for a fall of 1.8% and have tumbled 30% in the last year.
It has been a rocky few months for the online grocer, which is facing competition.
Last month the UK’s Morrisons, third-largest supermarket group, teamed up with Amazon to provide a delivery service.