Ocado H126 results - 1H EBITDA slightly soft; 2H cost-savings back-end loaded as cash flow guidance reiterated despite higher than expected 1H cash burn

Research evidence excerpt

Ocado H126 results - 1H EBITDA slightly soft; 2H cost-savings back-end loaded as cash flow guidance reiterated despite higher than expected 1H cash burn

Marcus Diebel AC Europe Equity Research

(44-20) 7742-4447 16 July 2026 C A Z E N O V E

marcus.diebel@jpmorgan.com

Investment Thesis, Valuation and Risks

Ocado (Overweight; Price Target: 290p)

Investment Thesis

We remain OW on Ocado shares at this point as we argue that current share price levels

undervalue the company’s current (and already signed) portfolio of modules. On the basis

of an NPV per module of £18m, we estimate a share price level of 370p would factor in the

modules signed and ramping until 2028 – offering additional contract signing as a free

option. We keep our price target at 290p, assuming further closures of 36 modules, which

we see as highly unlikely and conservative (as of 2025, 122 modules were live). With

exclusivity rolled off in several markets and the company’s new store-based automation

(SBA) offering, we see the potential for new contract signings – particularly in markets

where there is demand for immediate delivery such as the US. While we argue that valuation

scans attractive and strong growth drivers are in place, we highlight that newsflow is likely

to continue to dominate as the key share price driver with any comments from Ocado’s

current partners or any progress made on securing SBA partnerships.

Valuation

Our Nov-27 price target of 290p already assumes further closures of 36 modules which we

see as highly unlikely. Our PT is primarily derived from our NPV of £18m per module.

Assumed number of CFCs in JPM Nov-27 price target

£ in million

£m

Nov-27 Equity Fair Value per share 290

Number of Shares as of FY27E 826

Implied Market Cap 2,394

Net debt (cash) as of FY27E 822

Implied EV 3,217