MoPh Markets

Rolls-Royce, Ocado, B&M — 3 Stocks to Watch

Last week was a whirlwind, and unexpectedly for us, the sentiment seemed to shift slightly more positively, despite headwinds remaining (we still have an overall bearish stance). While there are some signs that this week may also be positive, we are on the sidelines.

Even so, there are a couple of stocks that are beginning to look attractive. Here’s why we focus on Rolls-Royce (LON: RR.), Ocado (LON: OCDO), and B&M (LON: BME). 

Ocado (OCDO)

Source: Semrush
  • Ocado will release a trading statement for Q3 on Tuesday, September 13.
  • We previously mentioned Ocado as one of our three stocks to watch as we felt the stock could see a further decline due to soaring inflation, a struggling economy, and declining demand metrics. 
  • Since that article, Ocado shares fell 28.35% to a low of 670p on September 2. 
  • While demand data has yet to improve, investors are expecting a potentially negative trading statement, which leaves us Neutral for this release.

B&M (BME)

Source: Semrush
  • B&M is a discount retailer and could be one to watch over the coming weeks.
  • The stock has fallen over 45% in 2022, but with FY2022 revenue and pre-tax profit only falling slightly below 2021 levels (which jumped from the previous year), could we see a push higher from current lows? 
  • Web traffic has remained steady since a slight dip from its pandemic highs.
  • While we are not yet bullish on the stock, with inflation soaring, it is one we are keeping an eye on.

Rolls-Royce (RR.)

Source: TipRanks
  • Rolls-Royce is not on our coverage list, but given its 38% fall this year, it deserves a mention.
  • The pandemic hit the company substantially, with planes mostly grounded.
  • However, strong travel demand means flying hours are on the rise, and with the company’s small nuclear reactor business benefitting from the current energy crisis, positive signs for the company are creeping in.   
  • According to TipRanks, the average analyst price target for RR is 99.13p, representing a potential 25.9% upside.
  • There will be a point where Rolls-Royce shares, for the long-term, are almost a definite buy. However, we are not sure it’s there just yet given current macro conditions, so again, we are Neutral…but slowly leaning toward Bullish.

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