Citi upgraded its recommendation on London Stock Exchange shares on Wednesday to ‘buy’ from ‘neutral’ and upped the price target to 9,300p from 8,600p.
“LSE stock is simply too cheap in our view following the recent de-rating,” the bank said.
It noted the shares now trade on only 21x 2023 estimated earnings per share, which it said was low versus history and peers.
“EPS momentum has been poor, but in our view consensus has now largely corrected as cost messaging has improved,” Citi said.
“2022 should see a return to more respectable growth, with Refinitiv integration one step further along, an FX headwind set to become a tailwind and M&A optionality a feature once more.”
Ocado rallied on Wednesday after Berenberg lifted its stance on the stock to ‘buy’ from ‘hold’, highlighting an attractive entry point.
The bank noted that since its downgrade in March last year, when it felt expectations had become too high, Ocado shares have fallen 25% as sentiment was also affected by a fire at an Ocado facility, patent dispute concerns and a lack of deals.
“However, our underlying view is unchanged. Ocado’s ecosystem of grocery e-commerce solutions is best-in-class; we believe it will continue to sign more deals with both existing and new partners,” it said.
“We believe the rise of quick commerce (q-commerce) validates the market opportunity for Ocado Zoom, providing scope for incremental deals.”
Berenberg said that with the valuation and expectations re-based and litigation concerns easing, it reckons now is an attractive entry point into a “long-term winner”, hence the upgrade.
The bank cut its price target on the shares to 1,990p from 2,065p.
Analysts at Canaccord Genuity hiked their target price for shares of electric drive solution specialist Saietta Group on the basis of the ” continued high level of interest in the electrification of transport” and in anticipation of license sales announcements.
They also hailed the accelerated growth of the business and the acquisition of core revenues streams via the strategic purchase of e-Traction.
Indeed, the company had delivered on several key strategic objectives, they said.
Those objectives included acquiring new technology, adding 34 staff specialised in electrified drive train solutions and launched a new product, Propel, its line of next-generation electric marine propulsion solutions.
It also noted that the group remained on track to ramp up UK-based production capacity, achieving 100,000 units per year by 2024 with a new and more efficient facility at Bicester.
The broker also noted that Saietta had yet to announce any license sales, which Canaccord expected would prove a key catalyst over the coming months.
The group announced roughly £800,000-worth of sales for the first half of 2022 for a gross profit of £437,000.
Canaccord raised its target price from 225.0p to 275.0p and reiterated its ‘buy’ recommendation for the shares.
