Goldman Sachs downgrades Ocado to 'neutral' after outperformance

GS noted the share price has risen around 135% since Ocado announced its agreements with France's Casino last November and Canadian food retailer Sobeys in January to provide them with its end-to-end grocery solution, Ocado Smart Platform.

Since being added to the Conviction List in May 2014, the stock is up 79% versus the FTSE World Europe up 20%, the bank said. Since being added to the buy list in October 2013, the stock is up 34% versus the FTSE World Europe up 26, with no upside remaining to Goldman's unchanged 540p 12-month price target.

"While we believe there is a material opportunity for Ocado in the online grocery space, our target price already includes seven further OSP deals to be signed over the next 10 years of a similar size to those two.

"Thus, over the next 12 months, we see material upside only through the announcement of an agreement with a major grocer that could demand far more OSP capacity than we forecast, or a takeover bid - neither of which we have visibility on."

Goldman said its price target assumes UK retail revenues increase from £1.3bn in 2017 to £7bn in 2030.

At 1250 GMT, the shares were down 1.6% to 559.40p.