Royal Mail shares drop four per cent as Jefferies downgrades company

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Shares in Royal Mail were down more than four per cent this morning, after Jefferies cut its target price on the company.

Analysts at Jefferies reiterated their "underperform" rating on the group, but slashed the share price target to 300p from 330p. The stock was down 4.71 per cent at 421.1p at the time of writing.

Royal Mail has had a tough past few months, with the threat of Christmas strikes looming over management.

Workers have been balloted for industrial action over the closure of its final salary pension scheme - the scheme has been closed to new members since 2008, but remains open to future accrual, which Royal Mail says will cost it £1.3bn.

However, there was some good news for investors last month, when the firm revealed a £106m boost from the taxman "related to the decision to close the [Royal Mail Pension Plan] RMPP to future accrual after 31 March 2018".