MARKET REPORT: Traders are bullish on Ocado after winning the robot war
Ocado shot up the FTSE 100 index as the city remained optimistic about its prospects.
Ahead of the leading online supermarket’s quarterly results today, Jefferies increased its price target on the share from 550p to 750p.
The US investment bank said the upgrade reflected Ocado’s £200 million settlement in July with Norwegian robotics company Autostore, which will pay the sum over the next two years after a three-year legal battle.
The dispute began in October 2020 when Autostore said it had sued Ocado for infringement of technical patents relating to the robots it uses in its warehouses to pick and pack groceries.
JP Morgan also increased its medium-term profit margin forecasts from 7 percent to 8 percent for Ocado’s retail division. Shares rose 3.1 percent, or 23.4p, to 787p.
Boost: In July, Ocado agreed a £200 million settlement with Norwegian robotics company Autostore over infringing technical patents relating to the robots it uses in its warehouses
The FTSE 100 fell 0.8 percent, or 58.44 points, to 7652.94 and the FTSE 250 fell 1.8 percent, or 340.5 points, to 18449.27.
Oil prices rose slightly, with a barrel of Brent oil reaching almost $95.
James McCormack, research director at investment firm Cavendish, said analyst forecasts of $100 a barrel are becoming “less rare” as crude has risen more than 30 percent since mid-June.
But he added that there are signs the rally is “overblown.”
Marks & Spencer rose 1.3 per cent, or 2.8 cents, to 222.5 cents, as the strong High Street made a steady start to its return to the FTSE 100 index after a four-year hiatus.
There was also a much-needed breather for International Distributions Services (IDS) after JP Morgan said it believes its Royal Mail business is at an inflection point in terms of revenues and costs.
Stock watch – Dialight
Dialight fell 18.8 percent, or 44p, to 190p after warning full-year results would be worse than feared.
Orders at the LED lighting company fell 12 percent in the first six months of 2023, while sales fell 13 percent to £73.2 million.
It also swung to a loss of £4.2m after making a profit of £1.6m a year earlier.
But it remained hopeful of a better second half of the year with the start of its transformation plan aimed at simplifying the group.
It also plans to tap shareholders for new money.
The US investment bank also said IDS could revisit the idea of splitting Royal Mail and GLS once its UK operations return to profitability.
It upgraded its rating on the stock from ‘neutral’ to ‘overweight’ and raised its price target to 310p from 300p. And shares added 1.9 percent, or 5p, to 262.3p.
Mike Ashley’s fashion empire was back in the spotlight after reports emerged this weekend that it was in advanced talks to sell online clothing label Missguided to Asian fast fashion giant Shein.
Shares in Frasers Group, owner of Sports Direct, Jack Wills and Flannels, fell 0.9 percent, or 7p, to 797.5p.
Phoenix, the savings and pensions company, said it is on track to generate positive net fund flows for the group from 2024 for the first time in its history.
The insurer reported a 72 percent increase in net fund flows for new businesses to £3.1 billion in the six months to June. However, shares lost 2.2 percent, or 11.6p, to 526.4p.
Graphene producer Directa Plus will work with US strategic advisory and government relations firm Spectrum to explore opportunities to sell its technologies to the US defense sector. Shares rose 7.5 percent, or 3.5p, to 50p.
GSK’s news that US regulators have approved the use of the drug Ojjaara to treat patients suffering from myelofibrosis, blood cancer and anemia failed to excite investors. Shares fell 0.3 percent, or 4.2p, to 1,505.4p.
Fellow pharmaceutical group Futura Medical fell 4.2 percent, or 2.2 cents, to 50 cents after warning it would not make a profit for two years.
The group has cut its losses to £1.76 million in the first half of 2023 – from £2.46 million the year before.
Tan Delta Systems, which made its stock market debut last month, was hopeful that the two-month pilot deal it struck with India’s L&T Technology Services could lead to a “substantial” rollout of its sensors that analyze the quality of oil in engines. and generators used in ships, trains and trucks.
Shares rose 6.1 per cent, or 1.5p, to 26p yesterday.