Ocado Shares Just Hit Their Highest Level Since January – Here’s Why

Ocado Group (LON: OCDO) shares surged more than 15% on Wednesday, touching 256p intraday before settling around 255p — their highest level since late January — after JPMorgan sharply raised its price target on the online grocery technology group and pointed to accelerating momentum in its warehouse automation business.

JPMorgan analyst Marcus Diebel lifted his target price on Ocado to 290p from 245p, reiterating an “overweight” rating. Diebel argued that the market is valuing the technology group as though its customers were shutting down warehouses rather than opening new ones, and said the share price fails to reflect the value of contracts already signed, let alone anything new.

On his estimates, the current valuation implies further site closures rather than incremental openings — a scenario he considers overly pessimistic.

The upgrade lands against a backdrop of improving newsflow for Ocado, which now largely licenses its robotic warehouse technology to grocers worldwide after stepping back from being a retailer in its own right.

Earlier this month the company opened its first automated customer fulfilment centre in South Korea with partner Lotte Shopping, a facility in Busan designed to serve millions of customers.

In July, Ocado announced plans to build a large robotic warehouse for an unnamed European retailer, and the group has also been building out its partnership with existing UK client Asda.

Diebel said two things will determine the direction of the shares going forward: a steady flow of new deals across both large-scale fulfilment centres and smaller store-based automation systems, and delivering positive underlying cash flow by the end of this year, with full-year positive cash flow targeted for 2027.

He described a more constructive tone from chief executive Tim Steiner on a recent investor call as reinforcing his view that momentum is improving, and flagged potential additional orders from Asda as a possible near-term catalyst.

The analyst’s note also included a deep dive into rival automation systems, concluding that Ocado retains the ability to outbid competitors on new contracts. He described the risk-reward on the stock as “highly attractive,” while cautioning that volatility is likely to persist.

Ocado shares had fallen roughly 7% year-to-date coming into Wednesday’s session after a volatile 2026 that has seen the stock swing between roughly 159p and 289p — a range Diebel attributes to the “asymmetric, event-driven” nature of the investment case.