Ocado was a high riser on Wednesday as Peel Hunt said that Ocado Solutions has the potential to become the "standard" platform for retail logistics across all sectors as the operating system of retail.
"Whilst the company is currently focusing on exclusive contracts within the food retail vertical, we would advocate an eventual shift in its focus towards becoming the open industry standard; just like the Windows operating system, which has more than 80% market share as it didn't restrict itself to just IBM manufactured computers."
The brokerage, which hiked its price target on buy-rated Ocado to 1,700p from 610p, called it "the Microsoft of retail".
It argued that niche, closed, exclusive platforms like those from Apple lead to a quick rise, but eventual stagnation, whereas generic, open, standard platforms like Windows and Android supersize.
Peel Hunt said Ocado should adopt Microsoft's approach. It pointed out that in the 1980s, both Microsoft and Apple released their first graphical user interfaces but while Windows was available for all manufacturers of PCs, MacOS was only available on the Mac.
It said the benefits of Microsoft's approach are clear: higher penetration, stronger control, and greater revenue.
"In 2016 alone we postulate that for the top 100 store-based retailers with revenue of $3.4trn, Ocado could tap a portion of those companies' annual capex budget, an estimated $89bn in total. On a 15-year view, this takes us to a £10bn valuation for Solutions."
Jefferies downgraded McCarthy & Stone to 'hold' from 'buy' on Wednesday and slashed the price target to 116p from 267p following the retirement housebuilder's profit warning a day earlier.
"Whilst, the majority of Last Time Buyers voted for Brexit it seems to have made them more cautious around the housing market than Help to Buy aided First Time Buyers. The issue we see facing McCarthy & Stone is that after two years of increased Last Time Buyer inertia, we do not see how or why this paralysis will lift before the dust settles on the outcome of the UK's departure from the EU."
Still, Jefferies said it remains a fan of McCarthy & Stone's retirement living products and services, and that its "unparalleled" performance in customer satisfaction surveys suggests that the water at the well of the company "refreshes the parts others cannot reach".
"The problem is getting people to take the plunge," it said.
Jefferies cut its FY18 operating profit estimate by 32% to £72.5m, which is towards the mid-point of the current guidance range of £65-80m. Looking beyond FY18, it cut its operating profit estimates for FY19 by 49% and for FY20 by 48%.
McCarthy issued a profit warning on Tuesday amid increased caution from potential customers.
An anticipated strong spring selling season failed to materialise and the FTSE 250 company said it now forecast 2,100-2,300 sales for the financial year ending 31 August, from the 2,302 last year, meaning profits could fall between 17% to 32% to an expected operating profit range of £65-80m.
With Astrazeneca the strongest consensus 'buy' in the sector, broker Liberum has told concerned clients why it only rates the shares
at 'hold' rating since late last year, though it upped the share price target to £53 from £50.
"We believe significant upgrades are needed to maintain the current rating required to be a bull, but think this can only come from disproportionate clinical success. Meanwhile, the current share price already assumes by far the highest R&D returns in the sector."
Analysts see a disconnect between consensus forecasts and the market valuation, and suspect "real expectations for key pipeline assets are higher than the print suggests".
Liberum noted that the examples of Eli Lilly and Bristol-Myers Squibb show that maintaining a premium rating for a prolonged period requires 25-30% upgrades to expectations.
"We think almost all of the Astra pipeline would need to read out successfully to achieve this and support the bull case."
While a very rich vein of newsflow could deliver circa 30% upside to the valuation, the current share price implies around $1.42 is generated for every dollar
invested - far higher than most names in the sector.
As such the remarkable turnaround Astra has executed "looks in the valuation" and the shares are broadly correctly priced on fundamentals, "with non-fundamental upside potential if the rating is maintained on upgrades to a depressed compiled consensus".
Furthermore, while there is nowhere near enough data to be sure, analysts are a little concerned that management's very smart strategy for Imfinzi is "currently masking some underlying weakness in the molecule's profile that could undermine the pipeline optionality".