Numis expects multiple further deals from Ocado over medium-term, reiterates 'buy'

Analysts at Numis reiterated their 'buy' recommendation and 600p target price on shares of Ocado on Monday, telling clients that the grocery retailer's just announced deal with Sobeys was a "further convincing endorsement" of its platform and that it expected multiple further deals over the medium-term.

Earlier in the same day, Ocado announced it had inked a deal to provide the Canadian outfit - with annual sales of £14bn - with its end-to-end grocery solution, in a deal similar to the one recently agreed with France's Casino.

The broker also highlighted the supportive commentary on the deal from Sobeys's management, who said it would create "exceptional value".

Numis was of a similar opinion, telling clients Ocado's end-to-end solution was 'best-in-class', offering scalability, modularity, lower capex, rapid deployment and site flexibility.

"As if any more evidence were required, we see today's deal with Sobeys as a further convincing endorsement of the
value of Ocado’s OSP service to global grocery retailers."