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Royal Mail should get good news in the post from regulator and unions, says broker

16 Sep 2020, 09:54

https://www.proactiveinvestors.co.uk/co ... 29102.html

Royal Mail should get good news in the post from regulator and unions, says broker

The Swiss bank's analysts argue that there is more than a 50% probability that an agreement is reached with trade unions

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Royal Mail PLC (LON:RMG) is likely to reach an agreement with trade unions to improve productivity, analysts at UBS believe, leading to a reiteration of their ‘buy’ recommendation and an increase to their share price target.

“While the outcome of the negotiations with the unions remains binary, we argue there is more than a 50% probability that an agreement is reached,” the analysts said in a note to clients on Tuesday.

This opinion is based on Royal Mail management’s seemingly improved relationship with the union and a relatively dovish approach from the company with no compulsory redundancies.

Furthermore, the Swiss bank’s number crunchers expect the unions to be “in a position to receive a generous three-year pay deal if productivity improvements can be achieved”.

On the regulatory side, with Ofcom's UK user needs review by early October, the analysts said they “expect [it] could be positive and support the network cost reduction via five days delivery per week”.

Forecasts were also updated to reflect the largely positive trends shown in the recent trading update as well as the latest retail online penetration trends, which “remain favourable”.

For the UK parcels and letters arm, a £213mln underlying loss is forecast for the full year, “to reflect economic uncertainty and potential delays in negotiations with the unions”, with profit margins expected to improve in the medium-term.

Looking at data for the retail industry, UBS noted that European footfall at physical store destinations was around 25% below last year levels in early September, which bodes well for online parcel delivery companies, while Royal Mail is “catching up in terms of using technology to improve user experience” as its smartphone app is the second most downloaded parcel delivery app in the UK and the seventh most downloaded app in the lifestyle category.

Putting it all together, UBS upped its share price target to 304p per share from 215p before.

RM shares were up 3% to 232.6p on Tuesday morning.

Royal Mail should get good news in the post from regulator and unions, says broker

16 Sep 2020, 17:03

I'm probably jinxing it but it's so good to the shorters getting burnt, to think they could have closed their positions and walked away with their profit at less than 130p but the greedy lowlifes weren't satisfied with that.

Royal Mail should get good news in the post from regulator and unions, says broker

16 Sep 2020, 17:08

So the odds are as near to even as makes no ...well...odds.
Read all about it RM might reach agreement with unions or might not.

Royal Mail should get good news in the post from regulator and unions, says broker

16 Sep 2020, 20:56

Recently they were recommending caution, now: https://www.fool.co.uk/investing/2020/0 ... k-to-300p/

Why I think Royal Mail shares could be heading back to 300p


ha ha

and

https://www.directorstalkinterviews.com ... /412858522

Shares in Royal Mail with ticker code: LON:RMG has gained 2.48% or 5.7 points throughout today’s trading session so far. Market buyers have remained positive during the trading session. Range high for the period has seen 236.44 dipping to 229.7. The number of shares traded by this point in time totalled 1,099,027 while the daily average number of shares exchanged is 6,122,654. The 52 week high price for the shares is 258.6 which comes in at 28.6 points different to the previous business close and a 52 week low sitting at 118.86 a difference of some 111.14 points. Royal Mail has a 20 SMA of 200.55 and the 50 day moving average of 191.78. This puts the market cap at £2,357.00m at the time of this report. The share price is in GBX. Mcap is measured in GBP. This article was written with the last trade for Royal Mail being recorded at Wednesday, September 16, 2020 at 11:55:29 AM GMT with the stock price trading at 235.7 GBX.

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