(Bloomberg) —
Ocado Group Plc’s market valuation dropped below that of J Sainsbury Plc for the first time since early 2019, as investor enthusiasm over stocks that benefited during the pandemic fades.
The shares traded 5.2% lower as of 3:13 p.m. in London, taking its market capitalization to £5.39 billion ($6.58 billion). That compares with £5.48 billion for Sainsbury and £20.9 billion for Tesco Plc.
It’s a reversal of fortunes for Ocado, whose market value reached a peak of £21.7 billion in September 2020, surpassing that of Tesco as the pandemic fueled a surge in demand for online grocery shopping.
“Valuations have become much more realistic, with the enthusiasm for all things pandemic getting a sharp reality check,” said Michael Hewson, chief market analyst at CMC Markets UK. “Once Ocado can show it can start making a profit, perhaps the shares can start heading higher again.”
Thursday’s drop was part of a broader market decline, with European stocks catching up with Wednesday’s selloff in the US market as investors fled riskier assets.
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