Ocado Group PLC (LSE:OCDO) is still at risk of needing more capital, according to analysts at Royal Bank of Canada (TSX:RY), which repeated an ‘underperform’ rating and downgrade its price target.
Analyst Sherri Malek continues to see risks, and, with a 460p target reckons there’s around 8% downside from the current price of 502p per share.
“The group’s mid-term targets appear to have been pushed further out, as we expected they would, as management seeks to improve the group’s cash flow profile and reduce the need for additional financing. However, we continue to see risk of this, based on our forecasts,” Malek said in a note.
The analyst added: “We increase our midterm capex forecasts to meet the revised guidance, despite the reduced pace of CFC roll-out both in the UK and internationally,” Malek said in a note.
“Our group EBITDA forecasts, however, also increase as growth in operating costs is curbed.
“Net, our cash flow forecasts do not improve, hence the need for fresh capital remains, in our view.”
