MARKET REPORT: Ocado rollercoaster ride sends shares tumbling

Shares in Ocado tumbled nearly 17 per cent yesterday as its rollercoaster ride continued.

The online retailer-cum-technology stock slammed into reverse after a strong run that saw it more than double in value in less than five weeks.

The slump left many City observers scratching their heads with analysts putting it down to profit taking after the recent rally.

Ocado stock slammed into reverse after a strong run that saw it more than double in value in less than five weeks

But it marked yet another day for turmoil for long-suffering shareholders as well as founder and boss Tim Steiner whose 2.4 per cent stake is worth around £150million.

Ocado shares soared at the start of the pandemic amid booming demand for online grocery deliveries. 

But after peaking at close to 2900p a pop in late 2020, the stock was changing hands for less than 400p just a month ago.

The shares were back above 900p on Monday as its recent deal to build automated warehouses for Lotte in South Korea continued to provide support.

But yesterday it fell 16.8 per cent, or 155.4p, to 770.2p. ‘The recent rally of Ocado shares appears to have come to a shuddering halt,’ said Michael Hewson, chief market analyst at CMC Markets UK.

‘The shares have surged in recent days after the Lotte deal was announced, so a pullback was long overdue.’

Aston Martin shares skidded off track after analysts warned it may still need to raise fresh funds even after a cash injection over the summer.

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Rising energy prices pushed James Cropper to a loss.

The company, which makes the paper used to create Remembrance poppies for the Royal British Legion, reported a £0.8million loss in the six months to September. Revenue rose 23 per cent to £61.6million.

The firm, which also produces packaging for luxury brands, said it still expects to make a £2million profit for the year.

But this would be lower than the £5.4million pencilled in by analysts. Shares fell 9.8 per cent, or 90p, to 825p.

 

Jefferies said the FTSE 250 luxury car maker has shored up its business but remained at least two years away from implementing a ‘viable operating structure’.

Raising concerns about sales volumes and its size, Jefferies lowered its rating to ‘underperform’ from ‘hold’ and slashed the target price to 120p from 530p.

Worse still, it said in a ‘downside scenario’ the stock could fall to 40p. Shares plunged 7 per cent, or 9.95p, to 133.1p.

Aston Martin, a favourite of James Bond, raised fresh funds this summer which saw the Saudis take an 18.7 per cent stake, making them the second largest shareholder behind executive chairman Lawrence Stroll.

The FTSE 100 slipped 0.21 per cent, or 15.73 points, to 7369.44 and the FTSE 250 fell 0.85 per cent, or 166.37 points, to 19,455.88.

Imperial Brands counted the cost of withdrawing from Russia after its profit and revenue took a hit. 

The cigarette maker, which pulled out of Russia in April following Vladimir Putin’s invasion of Ukraine, saw its profit fall to £2.6billion from £3.2billion in the year to September. 

Revenue slid 0.7 per cent to £32.6billion. Imperial Brands sold its Volgograd factory in April and added that the loss on exit from Russia was £364million. 

Shares slid 0.5 per cent, or 11p, to 2027p. Power firm Drax gained 3 per cent, or 16.5p, to 564p following a vote of confidence from a City broker. 

RBC reiterated its ‘outperform’ rating and said it saw the recent slump in Drax’s share price as ‘misplaced’.

The broker said while a further windfall tax hike could see Drax pay an extra £1.5billion over five years, the Government may choose to be more lenient towards renewable electricity generators.

British Gas owner Centrica was also on the rise, up 3.4 per cent, or 2.82p, to 86.28p.

Investment manager Ninety One slumped on the back of a cocktail of economic woes.

The group said it endured a difficult spell amid soaring inflation, rising interest rates, the war in Ukraine and a fall in financial asset prices. 

Assets under management dropped 8pc to £132.3bn in the six months to September while clients removed £3.2billion from the group’s funds during the period. 

Profits tumbled 16 per cent to £110.6million. Shares plunged 4.9 per cent, or 10.8p, to 209.2p.

This post first appeared on Dailymail.co.uk