JPMorgan placed Ocado on 'positive catalyst watch' on Tuesday as it pointed to improving fundamentals.
The bank said it expects a strong message on free cash flow at the full-year results on 26 February.
JPM said share price volatility has been rather pronounced throughout 2025, but from here it sees several drivers for greater operational stability.
It highlighted clarity on Kroger, with the partnership confirmed to continue with six sites, as well as a strengthened balance sheet following the repayment of the 2025/2026 maturities and the receipt of the £260m ($350m) termination fee from Kroger this month.
JPM also pointed to a focus on cost optimisation and margin expansion, improving free cash flow conversion with management confirming in its recent meeting with chairman Adam Warby that it would be FCF breakeven on a full-year basis by 2027.
In addition, the bank said the recently announced termination of exclusivity in most markets provides Ocado with increased optionality, particularly in the US.
"We argue our Nov-27 290p price target (unchanged) reflects an implied reduction of an additional 37 modules (i.e. beyond Kroger's announced site closures) which we view as highly unlikely at this point," it said.
JPM - which rates Ocado at 'overweight' - noted positive feedback from both AEON and Coles, two other large clients of Ocado, during a recent investor call.
Elsewhere, Bank of America downgraded its stance on JD Sports to 'neutral' from 'buy' and cut the price target cut to 96p from 112p. In a research note in wihch it also downgraded Adidas - to 'underperform' from 'buy' - the bank said it expects a "material stepdown" in the sector's growth.
It said the 20-year "casualisation trend" was largely complete.
As far as JD Sports is concerned, BoA said the cost structure is largely fixed so revenue weakness creates a margin risk. It also noted that the third-quarter trading statement indicated no pre-tax profit rise in FY27. This points to further consensus earnings per share downgrades.
Morgan Stanley upgraded Rentokil Initial and RS Group, but downgraded DCC as it took a look at the European business services sector.
The bank lifted Rentokil to 'overweight' from 'equalweight' and upped the price target to 520p from 450p. It said it sees improving organic momentum in North America pest control through 2026 driving a re-rating, and scope for significant value to be unlocked over the medium term.
Morgan Stanley upgraded RS Group to 'overweight' from 'equalweight' and kept the price target at 790p. It downgraded DCC to 'equalweight' from 'overweight' and cut the price target to 5,750p from 6,150p.
"At RS Group, good progress made on costs, technology and efficiencies puts the group in a strong position to benefit from a cyclical recovery," it said. It said the stock has moved up to number 9 on its 'Best Business Model' ranking on a better organic outlook, and improved cash conversion.
The bank said it was neutralising DCC to equalweight as it sees few reasons to be positive into 2026 and limited catalysts for a re-rating as the group transitions towards a pure-play energy business.