Royal Mail share price: Investors eye results and strategy update

on May 17, 2019
Updated: Mar 11, 2020

Royal Mail Group (LON:RMG) is expected to post a drop in profit when it reports its full-year results next week. The privatised postal operator is further due to update investors on its strategy after warning earlier this year that letter volumes would decline more than previously expected.

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Royal Mail’s share price has slipped lower in London in today’s session, having given up 0.60 percent to 233.40p as of 14:15 BST. The stock is marginally underperforming the broader UK market, with the FTSE 250 index currently standing 0.44 percent lower at 19,444.95 points. The group’s shares have given up more than 57 percent of their value over the past year, as compared with about a 7.5-percent dip in the mid-cap index.

Royal Mail results preview

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Royal Mail is scheduled to update investors on its full-year performance on Wednesday and IG reports that the company is expected to report pre-tax profit of £342 million, down from £565 million a year earlier. Revenue meanwhile is expected to have risen slightly to £10.5 billion, from £10.2 billion a year earlier. Chris Beauchamp said in a note yesterday that the mid-cap company had beaten revenue forecasts in three of the last five updates.

Proactive Investors meanwhile reports that investors will be looking at any changes to guidance for the year ahead and new chairman Keith Williams’ strategy to address the slowdown in parcel volumes and ongoing struggles in the postal operator’s letters arm.

Analyst ratings update

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The 16 analysts offering 12-month targets for the Royal Mail share price have a median target of 255.50p on the shares, with a high estimate of 410.00p and a low estimate of 180.00p. As of May 10, the consensus forecast amongst 16 polled investment analysts covering the privatised postal operator has it that the company will underperform the market.