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Jefferies remains bearish on Royal Mail Group (LON:RMG), pointing to pension problems at the company. The comments come as the privatised postal operator prepares to conclude a consultation on its pension plan later this month.
Royal Mail’s share price closed little changed yesterday, climbing 0.07 percent to 404.50p, slightly outperforming the broader London market, with the benchmark FTSE 100 index shedding 24.14 points to end the session 0.33 percent lower at 7,350.12.
Jefferies reiterated its ‘underperform’ rating on Royal Mail yesterday, valuing the shares at 360p, arguing that pension problems at the group were coming to a head and there was a risk to the downside. The FTSE 100 group launched a consultation process with the members of its pension plan earlier this year, having warned that its defined benefit pension scheme, which guarantees a retirement income to members, is unaffordable beyond 2018.