Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
This would give more competion for Ocado retail UK and result in less probability that Amazon are seeking to takeover Ocado group..
https://www.theguardian.com/business/2023/oct/08/waitrose-in-talks-with-amazon-over-online-grocery-deal-says-report
The third main driver of Ocados share performance is Ocados own business model and performance. With a lack of current new overseas solutions deals, underperforming Ocado retail UK and doubts about further expansion of it's tech by Kroger it results in a downward slide in the shareprice.
Ocados online grocery delivery model consumes more fuel than others, as it chooses predominantly to deliver from large centralised CFCs . With the oil price highly elevated, and now a new middle east war, Ocados online grocery delivery model is becoming increasingly costly...
If anyone orders Ocado cfcs today then the reimagined Ocado kit can be included. That issue isn't holding back partners from ordering new CFCs. An extract from the 2022 reimagined Ocado results release:
"partners ordering standard-sized CFCs today (early 2022) for delivery in H2 2023 will have the following features enabled: 600 Series bots; the 600 grid and Optimised Site Design; Automated Frameload; On-grid Robotic Pick; Ocado Swift Router; and Ocado Flex."
Kroger taking over Ocado is always a possibility. They already hold 5.675% of Ocado group via an acquisition deal signed upon becoming an Ocado solutions customer.
Is it likely they will take over the whole group? Personally I believe not. As previously explained Kroger have many online grocery delivery partners, Shipt, Instacart etc. They sensibly have their bases covered in terms of being able to adapt to the future of online grocery delivery. It was rumoured early this year that Kroger were slowing down their decisions to rollout new CFCs other than those already committed to. I can't see that Kroger would be attracted by the current huge operating risk and cashflow needs of owning Ocado. Kroger's shareholders would be very reluctant to take Ocado onto their balance sheet. I believe they will continue to be a close collaborator but only that...
Takeover hopes have lifted the Ocado share price up over the summer. Lack of any substance to those rumours will bring the share price back down. Continued cold winds are blowing in the worldwide retail environment. Oil prices are highly elevated, increasing costs to Ocado currently and weighing on the attraction of its solutions operating model. An absence of significant new contracts leads the share to be sold down...
Bayobach,
It's been said there are clauses in the Kroger Ocado contract whereby Kroger have committed to build a certain amount of CFCs by a certain time or financial penalties are due to Ocado. I believe we are past that initial commitment now.
Kroger use a number of partners to deliver online groceries, Instacart and Shipt for example. They have also partnered with other robotics firms for home delivery, for example Nuro.
Kroger have their fingers in many pies re online grocery delivery. Which is a sensible approach given the future growth, demand and structure of online grocery delivery us unclear. Kroger are very committed to Ocado as they have built out many Ocado powered CFCs and are a major shareholder in Ocado. However they have other strong partnerships in the online grocery tech space. It was rumoured early this year that Kroger were slowing down their Ocado CFC build out/ expansion programme.
Thanks for the info re autostore joseywales and thanks bayobach for locating the supporting article.
That article is from Jan 2023. Though we haven't discussed it on this chat board the info will be known to analysts and major investors. One of the drawbacks of Ocado solutions model is they primarily sign country exclusive contracts. They've signed with Kroger in the US, so they can sign up with no other grocers in the US. The contract with Kroger doesn't allow this. Outside grocery there's opportunity to sign with others but within grocery once they sign to an overseas partner then they can sign with no others in grocery in that country. So Ocado cannot run a grocery trial in the US with any others as autostore has done, unless Kroger agreed to changes in the contract which is unlikely as Amazonfresh is a direct competitor.
Amazon have a range of robotics firms they are involved with or could utilise in grocery. An Amazon takeover of Ocado remains unlikely and the recent takeover talk has yielded no credible evidence to suggest otherwise. The June and July price rise takeover talk hype is rightly reversing.
Conditions for Ocado retail are very adverse. A lot of price cutting is taking place in an attempt to gain market share but this is eating into margins considerably. As the recent Ocado retail results showed growth, given the huge financial investment over the last year, remains very slow with existing customers spending less again, a trend that goes back many months. We could be about to go into a recession in the UK. The Ocado delivery model is heavy on fuel costs as vans deliver to houses from a central hub. These fuel costs are again rising greatly.
IMO its very justified that Ocado has fallen to current price levels and I see more probability of further falls than upside..
Ocado shares rose hugely in June/July on takeover hopes. So far there's no substance to those rumours so back down the share goes. Further digestion of the recent poor Ocado retail results by the market and the lack of new overseas contracts adds to the downward pressure..
That CFC has been under construction for a few years, the information is priced into the market. I've heard no rumours about Kroger cutting existing under construction CFCs. The question and the market moving information is re Kroger's future plans for Ocado....
Gioviano,
There are only 15 brokers that issue ratings on Ocado, not a hundred. I've not talked about Exanes target price. Exane have long had a low price target re Ocado. Nothing has changed there. Exane highlighted last week that Ocado retails latest results were poor. The market agreed and has marked the shares down, around 20% down from the results release as I type.
Exane increased their Ocado target price in their last rating on Ocado...
Mapper,
A third source..
https://www.thisismoney.co.uk/money/markets/article-12186651/MARKET-REPORT-Ocado-shares-surge-investors-bet-rebound.html
Mapper,
The previous lower Exane 365p June price target was widely reported in the press at the time, another source..
https://www.thegrocer.co.uk/finance/ocado-gets-vote-of-confidence-with-much-better-outlook/680318.article
Mapper,
Correction - 350p was Exanes Ocado target price before June. In June they issued a 365p target price. They issued a 390p target price last week. A source below:
https://www.grocerygazette.co.uk/2023/06/13/ocado-shares-surge/
Gioviano,
Exanes new target price for Ocado is 390p. Their previous Ocado target price issued in June was 350p. They have had a low target price for Ocado for an extended period.
You hadn't heard of Exane last week (even though they have been a key broker in covering Ocado over the last 10+ years). Now you are say they acting on behalf of a shorting enterprise. Of course you say this without any evidence.
The Ocado retail results were very poor. The market has passed judgement and marked the share price down accordingly.
a broker who have covered Ocado for over 10 years
That's one way of describing it onsolidground...
Obvious that the recent disappointing Ocado retail results have brought the share down a peg. With the lack of any substance to the takeover rumour and new contracts slow in materialising it's an obvious move currently by the market to discount the shareprice.
Cureboy,
Some broker ratings move the market, some don't. Depends on the quality of the research. Exanes research yesterday caused the market to re-evaluate the Ocado retail results (which imo were poor). This reversed the previous upward moves from the share price due to the expectation of good results and takeover gossip.
Cureboy, Exane are well known to me. Regarding Ocado they have closely followed the company from its inception and been one of a pack of leading analysts regarding the company. See below re their insights on Ocado 10 years ago for example..
https://www.standard.co.uk/business/markets/market-roundup-online-laggards-may-have-ocado-on-their-lists-reckons-exane-8481645.html
The Ocado share price recently rose greatly off the back of takeover speculation. Naturally as no takeover has come forward this share has slid back. Poor Ocado retail results have escalated the slide. When a share rises 20% it's cheered, when it falls it's always said it's due to market manipulation etc.
The fact that most here haven't even heard of Exane, part of the largest banking group in Europe, says a lot about how informed most posters are.