Ocado: New European CFC announcement provides a catalyst and underlines value of CFC offering

Research evidence excerpt

Ocado: New European CFC announcement provides a catalyst and underlines value of CFC offering

Marcus Diebel AC Europe Equity Research

(44-20) 7742-4447 21 July 2026 C A Z E N O V E

marcus.diebel@jpmorgan.com

Investment Thesis, Valuation and Risks

Ocado (Overweight; Price Target: 245p)

Investment Thesis

We remain OW on Ocado and 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 355p would factor in the modules signed

and ramping until 2028 (not accounting for today’s announcement) – offering additional

contract signing as a free option. We keep our price target at 245p, assuming further closures

of 49 modules (not accounting for today’s announcement), which we see as highly unlikely

and conservative (as of H126, 113 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 245p already assumes further closures of 49 modules (not

accounting for today’s announcement) 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 245

Number of Shares as of FY27E 826

Implied Market Cap 2,023