FTSE 100 grocery delivery firm Ocado Group PLC (LON:OCDO) has been upgraded to ‘Equal Weight’ from ‘Underweight’ by analysts at Barclays after share price movements meant the company’s valuation was now “reasonable”.
The UK investment bank downgraded the company in August after a share price surge in May on the back of a deal with US grocery giant Kroger led to the stock reaching a 5-year high of 1,146p in late July.
READ: Ocado shares gain as third quarter revenue rises 11.5%
Barclays said that the previous downgrade had been due to the fact that they believed the share price “discounted excessively optimistic scenarios”, and the recent drop back in the price brought it back in line with their valuation price target of 875p.
The analysts added that there had been “very little newsflow” since its valuation that would impact their forecasts, and as such moved the rating back to ‘Equal Weight’.
In late-morning trading Wednesday, Ocado shares were up 0.9% at 785.8p.