Home shopping group Ocado’s shares hit a new low yesterday, and from today the stock can no longer be propped up by Goldman Sachs acting as a trading counterparty.
Ocado’s shares lost 3.6% of their value yesterday, bringing the total decline since its flotation last month to 20.7%.Merrill Lynch initiated coverage of Ocado with an underperform rating.
Analyst Andrew Gwynn said: “Ten years of losses may, by 2011, finally become a small profit but Ocado has a long way to go before reaching its medium-term margin ambitions.
“Good though sales growth will probably be, the market typically pays for earnings rather than sales growth alone and as yet, there’s not much ‘E’ to value the shares.”
The broker set a 130p price target for Ocado.