Under-pressure Ocado shares jumped by almost 20% this week after a broker upgrade and a vote of confidence in its management board.

Analysts at BNP Paribas Exane upgraded the online retail pioneer from ‘sell’ to ‘neutral’ after coming away from its own CEO conference last week with the belief its “outlook and market sentiment are now much better aligned”.

A broker note said: “We frequently heard, for instance, our concerns on the pathway to cashflow break-even echoed, but we also believe that Ocado is taking a firmer grip on capex and operating costs.”

“Most striking is a move away from an internal focus on EBITDA (a key criticism we’ve had) to cash recognising a higher cost of capital,” it added.

That warmer sentiment saw it raise its target price for the stock by 3% to 365p.

It triggered a 3.6% rise to 400.6p on Monday and that momentum carried on through the week, to see the stock gain 18.3% week on week by Thursday afternoon to reach 432p.

That price is Ocado’s highest for over a month and has halted a slide that has seen it lose around 50% of its value over the past year, as its own sales and the online grocery market slowed and continued to see losses amid investment in tech.

However, even BNP Paribas Exane warned it did not sense “a big inflection” and its upgrade was based on trading “not getting worse”.

“To be clear, we get no sense that a big deal is around the corner or that the topline or earnings performance in Ocado Retail have strongly inflected,” it said. “The outlook for online grocery remains challenging to predict and we consequently remain of the view that partners will be reluctant to sign for new capacity.”

It said Ocado “still has a lot of proving to do”, noting questions around its ability to move into non-grocery automation, whether partners will order sufficient capacity to reach break-even and how to refinance its debt due in 2025 and 2026.

“One of our concerns was that Ocado could indefinitely invest to find the perfect model. However, for the first time since the group listed, we get a sense that Ocado is accepting that it is as close to perfection as makes sense to hope for in low-return grocery,” it concluded.

Ocado’s share price rose sharply during the early months of the pandemic in 2020 as its market share and growth soared, taking its shares above 2,800p in February 2021.

However, continued losses amid investment in its international rollout coupled with a slowdown of its UK Ocado Retail joint venture with M&S saw its market cap drop significantly from almost £30bn to today’s £3.6bn.