Ocado Group PLC (LSE:OCDO) shares rose in early trading on Thursday supported by news of an upgrade in rating from Barclays following recent results, albeit with an almost halved target price.
The bank's analysts have upped their rating for the grocery technology firm to 'equal weight' from 'underweight' though the target price was slashed to 775p from 1,500p.
In early deals, Ocado shares were 0.7% higher at 738.80p.
In a note to clients, the Barclays analysts said: "With Retail sales set to improve, balance sheet concerns reduced for the time being and CFC deal flow expectations tempered, we think the balance of upside and downside risks is now more evenly poised."
On July 21, Ocado reported its first half results showing lower revenues and bigger losses but insisted it has a “clear path” to at least £750mln of underlying earnings within four to six years.
Revenues of £1.26bn were generated by the online grocery group, down 4.4% on a year ago as gains for its Solutions software arms were offset by a decline for its UK retail joint venture with Marks & Spencer Group PLC.
Ocado's Retail arm’s £1.1bn was down 8.3%, while the UK Solutions & Logistics business saw revenues rise 10.7% to £395.6mln and International Solutions revenues jumped 120% to 58.5mln.
Retail’s decline reflected the 12% rise in active customers year on year being offset by changing customer behaviour leading to fall of 13% in baskets sizes, further compounded by the cost-of-living crisis in the UK, the company said.