RE: RMG or Aviva?28 May 2019 11:30
Goldman Sachs - I suppose they are ramping as well :-)
"With the stock trading on just 9x FY20E P/E, we believe that the risk/reward is significantly skewed to the upside (on our estimates, the stock is trading on just 6x FY22E P/E) and upgrade the stock to 'buy' with a 320p 12-month price target."
The analysts stated that although Royal Mail's profitability had been shrinking in recent years, partly due to weaker-than-expected volume performance in mail, UK top-line "should" return to growth allowing for margin expansion.
GS also highlighted the fact that Royal Mail had increased prices from January 2019, something it believes should "contribute positively" to its top line for the coming quarter.