Ocado Group PLC (LON:OCDO) has been downgraded to ‘underweight’ from ‘equal weight’ by analysts at Barclays, who questioned whether the recent surge in the online grocer’s share price reflected growth in its market opportunity.
In Monday note in which it also hiked its target price on the firm to 1,600p from 1,200p, the bank also said based on their own analysis Ocado’s current £16bn market cap was “excessively generous”, although they conceded that it was “hard to be scientific at this still-early stage” of the company’s development.
READ: Ocado target price hiked as Peel Hunt estimates firm could take 25% share of online grocery market
Barclays’ assessment is in contrast to an assessment last week by broker Peel Hunt, who predicted that the grocery delivery group will take a 25% share of the online market, hiking their target price to 2,490p from 1,700p.
Ocado shares were 0.9% lower at 2,221p in mid-morning trading, implying a 28% downside to Barclays new target price.