Ocado Group PLC (LSE:OCDO) (LSE:OCDO)’s share price is still “excessively high”, according to analysts at Barclays, who on Monday reiterated their ‘underweight’ rating on the grocery delivery group and cut their target price to 1,575p from 1,600p.
In a note, the bank’s analysts said while the extent of the stock’s overvaluation is “less pronounced as it was”, flagging previous highs of around 2,900p within the last year, they still saw “a 10% downside” to their new price target.
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“The valuation of Ocado is much more debatable than the other stocks we cover, so the evolving narrative is just as important,” Barclays said.
“Even here, we think that the very limited recent deal flow, the likely normalisation of Retail EBITDA margins and the emergence of competing solutions are all unhelpful to sentiment,” they added.
Shares in Ocado dropped 0.9% to 1,787.5p in late morning trading.