Bernstein has initiated coverage of Royal Mail Group (LON:RMG) at ‘market perform,’ Sharecast has reported. The move came as the analysts pointed to a positive outlook for the Parcels & Logistics sector.
Royal Mail’s share price has been little changed in London this morning, having inched 0.14 percent lower to 425.80p as of 08:38 BST. The stock is slightly outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.49 percent lower at 7,397.74 points. The postal operator’s shares have lost more than 12 percent of their value over the past year, and are down by nearly eight percent in the year-to-date.
Bernstein started coverage of Royal Mail yesterday, with a price target of 400p on the shares. The rating came as the analysts noted that the outlook for the Parcels & Logistics sector was ‘positive’. Sharecast quoted the broker as explaining that the industry was benefiting from e-commerce-driven demand for parcels, stronger margins driven by specialty logistics and global economic growth. The analysts, however, reckon that most of that is already priced in.
Royal Mail updated investors on its full-year performance last month, revealing a rise in overall profits, having benefitted from growth at its parcels business and strong performance at its GLS unit. The number of letters posted, however, continued its downtrend. The group is scheduled to release a trading update on July 18.
The 15 analysts offering 12-month price targets for Royal Mail for the Financial Times have a median target of 475.00p on the shares, with a high estimate of 590.00p and a low estimate of 350.00p. As of June 23, the consensus forecast amongst 17 polled investment analysts covering the privatised postal operator advises investors to hold their position in the company.