Online supermarket Ocado Group Plc's shares rose 2.9% at 1183.5 pence in morning trading today, making the retailer the biggest percentage gainer on the FTSE 100.
JP Morgan raised its price target slightly to 1073p from 1070p, citing model update; reiterating a neutral rating "purely on valuation grounds".
It flagged that Ocado is at a tipping point in terms of profitability, saying small absolute changes can lead to larger percentage changes.
JP Morgan views Ocado as operating a superior economic model than many store-based operators.
It said that Ocado operates with lowest picking costs in the industry and does not face the duplication of costs and capex that incumbents face.
It believes as Ocado benefits from the online shift, it should be able to improve buying and dilute costs and thus operate with higher margins,
Ocado shares up approximately 50% in value this year, compared with Morrison's, which has seen an approximate 15% decline, and Sainsbury's, which has seen a 30% fall.