Royal mail is undergoing transformation into working practices, involving posties been out on delivery much longer and virtually no indoor work. The sector they are in is extremely challenging, it seems most of the underlying measures to prop up the SP are of cost cutting nature. Yes the company as it stands is a dinosaur, but for the SP to go down to 3 to 3.50 is highly unlikely. That would give it a market cap of 3 billion. There property portfolio alone virtually warrents this SP and technicals do not support this
It's not something one would necessarily know. Anyway, I was only joking about RM's future. I do believe they will go down to 3.50-3.00 area in the short to medium term since the technicals on their chart is pointing that way and the struggles they are experiencing with regards to the fundamentals. But after that it really depends on whether their business model is viable in the ever changing parcel market. with growing number of larger retailers taking their deliveries in house and the increasing technologies that are coming into this industry e.g. possibility of drone delivery, for example. They could survive or go bust. My overwhelming feeling is that it will go the way of companies like HMV, Woolworthths, etc. Those companies could not face up to the changing macro environment. Royal Mail is in the same boat in some ways. The declining letters, low parcel margins, large companies like Amazon and Argos taking deliveries in house and others likely to follow. But if RM does survive then it will likely become a steady but boring performer, with share price steady around the 4.00 to 6.00 for years to come.
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