(Sharecast News) - Shares in Ocado Group slumped on Tuesday, bringing a recent rally in the online grocer to an abrupt halt.
As at noon GMT, the stock had lost 12% at 811.2p, partially reversing substantial gains made earlier this month, when Ocado secured a deal to provide warehouse technology to South Korean retailer Lotte Shopping.
That drove shares in the loss-making blue chip nearly 40% higher, but on Tuesday gains were starting to be pared back.
Weighing on Ocado was a column in The Times advising investors to avoid the stock, citing cost of living pressures, inflation and high capital expenditure.
The Tempus column noted: "Despite Ocado's market value shrinking by more than two thirds since a peak at the end of 2020, an enterprise value of 82 times forecast earnings before tax and other charges puts the shares nowhere near bargain territory."
In September, Ocado warned that annual sales were set to suffer this year, as hard-pressed customers traded down to cheaper products and brought less overall. Sales rose 2.7% in the 13 weeks to 28 August, but the value of the average basket fell 6%, to £116.
As a result, annual sales are now expected to be show a "small" decline, with close to break-even earnings before interest, tax, depreciation and amortisation. Analysts had been hoping for 5% sales growth and underlying profits of £48m.
Ocado (OCDO)
