Shares in Royal Mail Group (LON:RMG) have lost ground in London in today’s session as JPMorgan trimmed its rating on the postal operator, citing ‘lack of positive catalysts,’ Proactive Investors reports. The move came after the company recently updated investors on its full-year performance, revealing a fall in profit in the financial year ended March 25.
As of 13:25 BST, Royal Mail’s share price had lost 1.04 percent to 550.20p, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.26 percent higher at 7,879.74 points. The group’s shares have added just under 30 percent to their value over the past year, as compared with about a five-percent gain in the Footsie.
JPMorgan trims rating on Royal Mail
JPMorgan cut its rating on Royal Mail from ‘buy’ to ‘neutral’ today, while hiking its price target on the shares from 530p to 561p.
“We downgrade RMG to neutral due to the recent re-rating in the share price, the lack of positive catalysts moving forward and (in our view) a more operationally challenged period ahead,” the analysts explained, as quoted by Proactive Investors, adding that their earnings per share forecasts were also reduced by three-seven percent “due to higher transformation costs and weaker underlying expectations”.
Other analysts on postal operator
As of May 18, 2018, the consensus forecast amongst 18 polled investment analysts covering Royal Mail for the Financial Times advises investors to hold their position in the company. The 16 analysts offering 12-month price targets for the postal operator for the newspaper have a median target of 480.00p on the shares.
Last week, Liberum reiterated its ‘sell’ stance on Royal Mail, arguing that a bigger push was needed to stop the postal operator from missing its target.