Berenberg ups Ocado to ‘buy’, cites attractive entry point

The bank noted that since its downgrade in March last year, when it felt expectations had become too high, Ocado shares have fallen 25% as sentiment was also affected by a fire at an Ocado facility, patent dispute concerns and a lack of deals.

"However, our underlying view is unchanged. Ocado’s ecosystem of grocery e-commerce solutions is best-in-class; we believe it will continue to sign more deals with both existing and new partners," it said.

"We believe the rise of quick commerce (q-commerce) validates the market opportunity for Ocado Zoom, providing scope for incremental deals."

Berenberg said that with the valuation and expectations re-based and litigation concerns easing, it reckons now is an attractive entry point into a "long-term winner", hence the upgrade.

The bank cut its price target on the shares to 1,990p from 2,065p.

At 0905 GMT, the shares were up 5% at 1,633p.