Grocery delivery giant Ocado got a boost after a broker branded it the ‘partner of choice’ for supermarkets looking to cash in on the online shopping boom accelerated by the pandemic.
Analysts at Jefferies said online shopping ‘has a long way to go’, noting that in the UK groceries bought online were still only 12 per cent of the total, but adding that many supermarkets would need to re-engineer business models to deliver groceries to customers, incurring expenses ‘beyond the appetite’ of many.
As a result, these firms need ‘a partner with a heritage in grocery [and] automation’. ‘In our view, Ocado remains a partner of choice in this regard,’ analysts said.
Tipped by Jefferies, a broker who upgraded Ocado from ‘underperform to hold’. The target price was nearly doubled to 1850p (950p) and almost tripled to 1850p. Stock rose 0.8% or 13p to 1633.5p
Jefferies noted that Ocado’s partnership with Marks & Spencer, signed in 2019, was ‘proof of the pudding’ for its ability to run an effective online delivery service.
The firm’s technology arm, which provides robots that can pack orders automatically, was an ‘economically viable’ option.
The broker upgraded Ocado to ‘hold’ from ‘underperform’ and nearly doubled their target price to 1850p from 950p. The stock rose by 0.8% or 13p to 1633.5p.
The FTSE 100 fell 0.04 percentage points or 2.85 points to 7337.05. Meanwhile, the FTSE 250 dropped 0.04 percent or 7.74 points to 23230.43.
Stock Watch – Equals Group
Shares in Equals Group traded near a two-year high after it said it had ‘significantly exceeded’ expectations.
The international payments and money transfer firm raked in revenues of £40.4million in the year to date – 51 per cent higher than the same period in 2020 – with takings more than doubling across October and November to £11.6million.
Its numbers were boosted by a transaction with a ‘large corporate client’ during the period which had generated £1.5million in revenues. Shares rose 8.7%, or 5.5%, to 68.5p.
The Government’s plans to issue vaccine passports to people who want to return home and to order them to work at home caused concern in markets.
Games Workshop, maker of Warhammer battle figurines, took a hit after higher costs ate into profits, which, for the six months to November 28, are expected to be at least £86million, down from £91.6million in the same period a year ago.
Revenue is expected to hit at least £190million, from £187million. After it announced a partnership with Nexon, a virtual reality company, the stock dropped by 70p to 9690p.
British Gas owner Centrica struck an £800million deal to sell its Norwegian oil and gas assets as part of plans to slim down. This sale also includes Statfjord, the oilfield located at the UK-Norwegian border in the North Sea.
Stocks fell 0.2% or 0.1p at 67.58p
Centamin, a mid-cap miner, posted the largest increase in gold reserves over a decade in an Egypt mine of more than 1moz.
It is underpinning the production of 500,000 ounces each year for the next 10 years.
The shares dropped 0.74p to 91.38p. Analysts at Liberum stated that the higher gold reserves will be outweighed by rising costs.
AIM heavyweight Clinigen agreed to a £1.2billion takeover deal with UK private equity firm Triton Investment Management.
The pharma group’s shareholders will receive 883p in cash for each share they hold, a 41 per cent premium to the closing price on December 1, the day before the offer was first announced.
Shares rose 11.3 percent or 92.5p at 910p. This suggests that investors might be anticipating a better offer.
Meanwhile, mid-cap oiler Diversified Energy lifted 2.8 per cent, or 2.8p, to 104.6p after a 32 per cent rise in its credit limit was approved by lenders.
It now has access to £623million from banks, which was attributed to a recent hike in oil and gas prices and an acquisition.
Blue-chip chemicals firm Croda rose 2.2 per cent, or 225p, to 10,285p after UBS upgraded the stock to ‘buy’ from ‘neutral’, saying they expected higher than expected earnings in 2022.