Ocado offers 'creditable alternative to Amazon', BoAML upgrades

Merrill, which kept its price target at 1,020p and double-upgraded the shares to 'buy', was "supportive" of the FTSE 100 group's business model in the UK and feels the four major overseas partnerships in Europe and North America "demonstrate that Ocado's unique full online solution is a credible and a profitable alternative to Amazon's threat in a growing market".

Ahead of a crucial three years where it must demonstrate the economics of its partnership model, the opening on time of Ocado's fourth 'customer fulfilment centre' in Erith, south-east London, gave analysts confidence of management's ability to deliver on time.

Noting that management had flagged other "opportunities" at interim results, the analysts said this implied potential for another earnings stream, but they were "unsure of the outcome and how big the potential profit could be but it implies another source of revenue for a foreseeable future notch not priced in".