Shares in online-only grocer Ocado Group Plc could rise tenfold by 2030, according to analysts at Bernstein.
As the supermarket prepares for a new joint venture with Marks & Spencer in September, analysts have suggested Ocado could see its stock price rise tenfold in the next decade.
Ocado revealed a £214 million loss over its last year coming well above analyst expectations thanks to heavy investments in robotic warehouses overseas.
The online grocery giant posted a pre-tax loss of £214 million for the year to December 1 2019, significantly more than the £134 million loss analysts had expected.
Despite the losses, Bernstein sees the potential for Ocado’s share price to be valued at between £40 and £100 on the assumption that more warehouses will be built globally to meet demand.
Ocado currently has deals to supply 58 warehouses, compared with the 209 that would be needed in 10 years’ time if consumers in the developed world do 10 per cent of their shopping online and Ocado’s retail partners have a 30 per cent share of their domestic markets by then, Bernstein analyst Bruno Monteyne wrote in a note Thursday, as cited by Bloomberg.
Monteyne added that there’s potential for even bigger growth:
“Grocery e-commerce penetration will be heavily linked to how many shopping missions can end up being done online,” Monteyne wrote.
“Reaching 10 per cent e-commerce penetration by 2030, as in our base case, has further upside. Maybe that will take another decade, but 10 per cent is not necessarily the end stage of grocery e-commerce.”