Ocado

Source: CMC Markets, 14 June 2018

Ocado is the world’s largest dedicated online grocery retailer with over 580,000 active customers. Ocado has also developed a sophisticated online shopping platform that it licenses to major food retailers around the world. This tech-focused strategy has been vindicated after the retailer struck a series of partnership deals in the UK, Sweden, France, Canada and, most recently, the US with retail giant Kroger.

These partnerships have led to Ocado’s share price experiencing very good performance in 2018, with shares +170% year-to-date. Being a young company, Ocado has traded only during one previous World Cup, with its share price +5.4% during the 2014 tournament (Source: LSE).

Ocado could benefit from World Cup momentum by tapping into increased consumer spending on fast online food delivery, as families and friends gather to watch matches. Technical analysis of Ocado’s share price chart shows a strong uptrend and rising channel since November 2017, with high ADX (trend strength) and Relative Strength Index (RSI) stuck overbought (a bullish sign).

The risk is that the trend gets exhausted, negative financial results lead to a trend reversal and/or price correction to the channel floor. Analyst consensus is bullish, with 41% of brokers recommending “Buy”, 48% neutral and only 12% recommending “Sell” (Source: Bloomberg,14 June 2018).

Just Eat

Source: CMC Markets, 14 June 2018

Just Eat is a leading on-line food delivery platform that has partnered with over 28,000 UK restaurants to deliver takeaway meals to households and offices around the country.

Just Eat shares have been on an uptrend, with a rising channel dating back to the beginning of 2017. Its 2018 share price is largely flat, though, due to increasing competition in the online space (Deliveroo)

As a new company, Just Eat has only 1 previous World Cup event under its belt, with its share price rising a modest 1.8% during the 2014 World Cup in Brazil (Source: LSE).

With online food delivery platforms having grown in popularity, Just Eat has potential to benefit from a momentum boost during this 2018 World Cup, as people gather to watch football matches.

The main risks for Just Eat shares comes from growing competition from similar food delivery platforms (i.e. Deliveroo, Uber Eats) eating away at its market share.

Broker consensus on Just Eat is bullish, with over 72% of analysts recommending “Buy”, 11% neutral, while 16.7% say “Sell”. With an average 12-month target price of 896p, more than 66% of brokers see potential upside from current levels (Source: Bloomberg, 14 June 2018).

International Consolidated Airlines Group

Source: CMC Markets, 15 June 2018

International Consolidated Airlines Group (IAG) is an Anglo-Spanish holding company with controlling stakes in the UK flag carrier British Airways, Spain’s Iberia and Irish Aer Lingus. With direct routes to most of the major World Cup venues in Russia, IAG could benefit from increased passenger traffic.

IAG share price has been on an uptrend since April, seeing strong Q2 positive momentum. The stock traded in a narrow sideways channel in May, but has since broken out to fresh 20-year highs, opening door for a recovery to 1997 all-time highs.

Oil prices retreating from their recent highs and potential for increased passenger traffic to Russia (adding to solid passenger numbers in May) could help extend the share price breakout. However, the risk of oil/fuel prices returning to an upward trajectory could force the share price to retreat below the former resistance line.

Broker consensus is bullish, with 55% of analysts recommending “Buy”, 28% neutral and only 7% saying “Sell”. The average medium-term target of 742p (close to record highs), a median of 795p from June broker updates and 54% of analysts suggesting upside from current levels supports the breakout towards record high, though events which deter people from flying (such as terrorism) could lead to more negative updates (Source: Bloomberg,15 June 2018).

BT Group

Source: CMC Markets, 14 June 2018

BT Group is a broadly diversified telecommunication holding that has long been a staple of British everyday life. BT offers a plethora of products that could be attractive to consumers during the World Cup, including mobile broadband (via its EE subsidiary) and home broadband services for streaming matches at home and on the go.

BT has a long history with the World Cup, with its best share price performance during 1998 World Cup in France (+18.5%), while its average performance over the past 6 tournaments has been broadly flat at -0.7% (Source: LSE).

The BT share price has been on a downtrend since early 2017, but recently encountered horizontal support that has seen the downtrend slow and after a short period of consolidation delivered a bullish breakout above 210p. The RSI and Stochastics technical indicators are moving higher, supporting the breakout, though risks remain that the breakout proves short-lived, the shares turn lower, break below 201p and extend the downtrend.

Broker consensus is relatively bullish, with 48% of analysts recommending “Buy”, 44% neutral and only 8% recommending “Sell”. 91% of brokers suggest upside from current share price levels, with a medium-term target price of 284p and a recent update from broker Macquarie suggesting a significantly higher 355p 12-month target price (Source: Bloomberg,14 June 2018).

Greene King

Source: CMC Markets, 14 June 2018

Restaurant operator Greene King is the largest owner of UK pubs and breweries. With pubs being a mainstay of communal football culture, Greene King has potential to further benefit from the boost to customer footfall that the World Cup brings to its establishments. As football lovers gather to celebrate and watch the World Cup with friends and family, pub operators could do well commercially.

Greene King stands apart from its competitors having analysable share price performance for all 6 of the last World Cup, its share price rising by 11.2% during the 2010 WC in South Africa and 10.1% during the 2006 event in Germany, pointing to a historical bond between pub operators and football tournaments. With a 12.6% year-to-date share price gain, Greene King has also been a strong recent performer (Source: LSE 13 June 2018).

Broker consensus on Greene King is mixed-to-positive, indicating potential risks that the uptrend could tire and reverse, though 47% of brokers still suggest “Buy”, 23.5% are neutral, while 29.4% say “Sell”.

The average medium-term broker target price (589p) is below current levels due to strong share price movements in May and June 2018, which have outpaced lagging broker reports. That said, a recent update from Liberum (11 May 2018) suggests a target price of 670p, meaning that some brokers still see upside potential for Greene King shares over the medium term (Source: Bloomberg, 14 June 2018).