Royal Mail’s share price (LON:RMG) is continuing its rollercoaster week, trading higher this morning, following analyst comments. Today’s move higher follows a slump yesterday, in the wake of the postal operator’s full-year results and strategy update which lent support to the shares earlier in the week.
As of 09:08 BST, Royal Mail’s share price had added 3.92 percent to 205.40p, lending support to the FTSE 250 index which currently stands 0.60 percent higher at 19,145.51 points. The group’s shares have given up more than 62 percent of their value over the past year, as compared with about an 8.8-percent dip in the mid-cap benchmark.
Liberum trims target on Royal Mail share price
Liberum lifted its rating on Royal Mail from ‘sell’ to ‘hold’ today, while trimming its price target on the shares from 240p to 185p. Proactive Investors quoted the broker’s analyst Gerald Khoo as commenting that the postal operator’s new strategy had “brought clarity to how management intends to deal with the substantial structural challenges faced by the group”.
“We remain deeply cautious on the short-term outlook, the long-term challenges and the execution risks in Royal Mail’s new strategy,” the analyst elaborated, adding that the broker believed that there “could be yet more downside risk in the short term”.
Royal Mail announced its ‘refreshed strategy’ earlier this week which will see it automate its UK sorting operations, and invest £1.8 billion in the country’s postal system over the next five years. The postal operator, however, slashed its payout to shareholders to finance the investments.
Analyst ratings update
The 16 analysts offering 12-month targets for the Royal Mail share price for the Financial Times have a median target of 245.50p, with a high estimate of 360.00p and a low estimate of 180.00p. According to MarketBeat, the mid-cap company currently has a consensus ‘hold’ rating and an average price target of 289.67p.