Royal Mail: stock on strike, as a broker says 'sell'
(CercleFinance.com) - The Royal Mail share is in a spin this Friday falling almost 17% in mid-afternoon trading, hit by comments made by an analyst at Liberum who confirmed a "Sell" rating on it, with a target price of 120 pence, believing that the crisis has "made impossible what was already unlikely ".
"We were bearish on Royal Mail before the current crisis, seeing it as highly improbable that management could hit its 2024 targets on schedule without active co-operation from staff and trade unions, which was not forthcoming," the broker said.
"Even before the crisis we had already forecast the suspension of dividends, to preserve cash for future restructuring and to demonstrate that shareholders were sharing the pain with staff being asked to endure yet more change and upheaval. We had also forecast the group would not hit its 2024 targets. The significant and uncertain impact of the COVID-19 outbreak has now made the achievement of these targets impossible."
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
"We were bearish on Royal Mail before the current crisis, seeing it as highly improbable that management could hit its 2024 targets on schedule without active co-operation from staff and trade unions, which was not forthcoming," the broker said.
"Even before the crisis we had already forecast the suspension of dividends, to preserve cash for future restructuring and to demonstrate that shareholders were sharing the pain with staff being asked to endure yet more change and upheaval. We had also forecast the group would not hit its 2024 targets. The significant and uncertain impact of the COVID-19 outbreak has now made the achievement of these targets impossible."
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.