Goldman Sachs has slashed its earnings forecasts for Ocado, fuelling a 10% drop in the online grocer’s share price since Wednesday.
Analyst Karen Hooi at Goldman, which was one of the banks to lead Ocado’s flotation in July last year, cut the broker’s full-year sales growth prediction from 23% to 20%.
Citing continued capacity constraints, the analyst also lowered its profit forecasts by 7% for the current year and by 15% for 2012.
“We retain our view that successful capacity expansion remains key for Ocado to meet our revenue and profitability estimates,” said Hooi. On the basis of the new estimates, Goldman revised its six-month share price target for Ocado from 297p to 225p.
The news comes after Ocado last week revealed plans to open a new 43,00 sq ft regional depot near Oxford capable of processing 10,000 orders a week to tackle capacity problems.
Ocado adds Oxford base to distribution network (4 August 2011)
How much ground has been lost by Waitrose web woes? (analysis; 30 July 2011)
Ocado celebrates profits landmark with Carrefour tie-up (27 June 2011)