The online supermarket Ocado sinks 20% in the worst fall in 11 years
Ocado lost a fifth of its value yesterday in its biggest sell-off in more than a decade.
On a brutal day for investors, the stock fell 19.9 per cent, or 160.6p, to 647.8p after a leading analyst resumed his negative view.
The fall wiped almost £1.4bn from the value of the online supermarket group, shaving £32m from the stake held by co-founder and chief executive Tim Steiner.
The drop, the biggest in 11 years, came after a note from BNP Paribas Exane analyst Andrew Gwynn, in which he downgraded the stock’s outlook.
Ocado was among the winners of the lockdown, with its share price hitting a record 2,895p in September 2020. But it fell as low as 343p in June this year.
Drop: In a brutal day for investors, Ocado shares fell 19.9%, or 160.6p, to 647.8p after a top analyst resumed his negative view.
The stock has risen in recent weeks and was trading above 800p before yesterday’s sell-off.
In his note, Gwynn downgraded his recommendation from “neutral” to “underperform,” explaining that the recent rally had left the risk-reward ratio “unbalanced.” The note adds that stocks “appear to be out of balance again.”
Ocado had enjoyed a good start to the week, with upbeat notes from analysts at Jefferies and JP Morgan and then positive results from its online shopping joint venture with Marks & Spencer.
Ocado Retail’s report on Tuesday showed customers returning to buy more products after a series of price cuts brought back middle-class shoppers.
Sales for the three months to August 27 were 7.2 per cent higher than 12 months earlier, at £569.6 million.