Ocado shares rose as analysts saw improvement in its fortunes.
BNP Paribas Exane told its clients the FTSE 100 online supermarket’s ‘outlook and market sentiment are much better aligned’.
The broker, which also said Ocado has taken a firmer grip on managing its spending and operating costs, raised its rating to ‘neutral’ and increased the target price by 3 per cent to 365p.
Shares, which at one point were up as much as 10 per cent, closed 3.6 per cent, or 14p higher, at 400.6p.
‘We do though believe that having struggled post the pandemic to grow volume and excess capacity, Ocado is entering a more settled phase,’ the broker added.
New rating: BNP Paribas Exane said Ocado has taken a firmer grip on managing its spending and operating costs
Ocado was among the lockdown winners, with its share price hitting a record 2895p in September 2020. But it has seemingly been in freefall for the past two years, falling as low as 343p last week.
BNP insisted Ocado still has much to prove and warned the outlook for online grocery ‘remains challenging to predict’.
The group narrowly escaped being booted out of the FTSE 100 index in the latest reshuffle.
The FTSE 100 rose 0.1 per cent, or 8.33 points, to 7570.69 and the FTSE 250 gained 0.5 per cent, or 99.15 points, to 19190.81.
Oil prices slid more than 4pc towards $72 a barrel amid fresh fears over the global economy.
Oil major BP dropped 1.3 per cent, or 6.3p, to 462.6p and Shell lost 0.7 per cent, or 16.5p, to 2278p. In the FTSE 250, Tullow Oil slipped 2.7 per cent, or 0.7p, to 25.02p and Harbour Energy fell 2.2 per cent, or 5.6p, to 245.4p.
Crest Nicholson led a rally among housebuilders after UBS raised its rating to ‘neutral’ from ‘sell’ and lifted the target price to 245p from 210p.
Stock Watch – Futura Medical
Shares in Futura Medical soared after US regulators approved the over-the-counter sale of its gel that treats erectile dysfunction.
The pharma company’s MED3000 product can work within ten minutes and is available to buy without prescription, offering an alternative to oral medications such as Viagra.
It is already sold in the UK in Boots stores under the brand name Eroxon.
The product is also available in Belgium. Shares surged 12.4 per cent, or 5.3p, to 48.2p.
The investment bank said house prices have held up better than feared alongside an increase in demand. Shares added 2.2 per cent, or 5p, to 234p.
But Thungela Resources sank into the red after the firm, which was spun off from the blue-chip mining giant Anglo American (down 1.7 per cent, or 40.5p, to 2416.5p) in 2021, warned of a sharp fall in coal prices and ongoing issues with South Africa’s state-owned operator Transnet Freight Rail (TFR).
The group’s profits have been affected by weaker demand from China alongside softer gas and coal prices. Shares fell 1.4 per cent, or 8.6p, to 589.4p.
Croda International shares rose as the stock clawed back some of the losses made after last week’s profit warning.
On Friday, the chemicals group said its profits for the year to the end of May were likely to be between £370million and £400million, short of the £440million expected by analysts. That sent shares down more than 12 per cent.
But the stock recovered slightly yesterday, rising 3.2 per cent, or 168p, to 5442p.
Travel stocks were in demand as Carnival enjoyed upgrades from analysts at Bank of America and JP Morgan.
The brokers said there were few signs of slowing momentum at the international cruise line business.
Shares soared 12.7 per cent, or 115.1p, to 1024.5p.
Wizz Air added 4.3 per cent, or 117p, to 2842p after JP Morgan raised its target price to 4050p from 3750p, and holiday group Tui gained 3.6 per cent, or 20p, to 571.5p.
There was less to cheer for the real estate sector, however, as Goldman Sachs issued a bleak outlook on the Central London office market.
The broker lowered its ratings on property investment and development company companies Segro – to ‘neutral’ from ‘buy’ – and Great Portland Estates – to ‘sell’ from ‘neutral.
Shares in Segro fell 2.7 per cent, or 21.2p, to 779.4p and Great Portland Estates slid 2.4 per cent, or 11.6p, to 472.4p.
