Ocado Shares: Analyst Sees Lack of Positive Catalysts on the Horizon

Ocado (LON: OCDO) shares fell sharply on Thursday after full-year results and guidance prompted a downbeat market reaction, with the stock dropping 6.4% on the day.

The shares are now down 8.8% year to date and more than 36% over the past 12 months.

Hargreaves Lansdown said results were “slightly ahead of forecasts,” but stressed that “markets are forward-looking, and soft guidance for 2026 was enough to send the shares lower.”

The core issue, analyst Aarin Chiekrie said, is whether Ocado can deliver the expansion needed to justify its heavy investment.

Customer Fulfilment Centres (CFCs) remain the heart of Ocado’s Technology Solutions division. Hargreaves Lansdown noted that these facilities offer “a host of cost savings and efficiency benefits,” but warned that success depends on “high volumes of orders from shoppers to make these mammoth warehouses worthwhile.”

With partners like Kroger and Sobeys scaling back their commitments, the firm added that it is “not convinced that Ocado can deliver these openings as expected.”

Ocado Retail, the joint venture with M&S, continues to show improving volumes and market share, helped by stronger brand perception. However, Hargreaves Lansdown cautioned that the division “is still loss-making and there’s no timeline for reaching the land of profitability.”

The broader financial picture remains challenging. Analysts said the balance sheet isn’t in the best of shape, and expectations of positive free cash flow later this year seem ambitious. They also warned that Ocado may need further fundraising, which risks shareholder dilution.

Hargreaves Lansdown concluded: “There don’t appear to be many positive catalysts on the horizon,” particularly if partners continue to slow CFC expansion plans.