Share price climbs ahead of Christmas trading update

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Royal Mail share price climbs ahead of Christmas trading update

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Royal Mail’s (LON:RMG) share price has advanced today, ahead of the publication of its crucial Christmas trading figures tomorrow. Commenting on the expected release, Credit Suisse analyst Hugo Turner said in a downbeat note last week: “Christmas trading, a mixed bag: We think parcels pricing will be weaker but volumes should be marginally stronger than market expectations, so broadly a neutral net impact over Christmas.”

According to trading platform IG, institutional expectations are for adjusted earnings per share to increase from £0.263 up to £0.32, while sales are still being called at the same levels as last year. However, Royal Mail’s pre tax profits are expected to plummet from £1.666 billion to £407.143 million.
Last month’s collapse of troubled parcel-delivery firm City Link has not represented "a major positive" for Royal Mail, according to UBS. While the news saw the FTSE 100 group’s shares bounce, City Link was not its biggest competitor and only had a small market share and thus "relatively limited impact", the Swiss broker recently noted Potentially more beneficial to Royal Mail has been the rise in property valuations. After previously seeing the book value set at £500 million, it now appears that the value of the company’s portfolio of redundant sorting offices might be closer to the £1 billion mark (Royal Mail share price: Company’s surplus property value soars).

Royal Mail’s share price rose almost two percent at the opening bell this morning, but eased later during the session. As of 10:05 GMT, the stock was changing hands at 429.00p – 0.66 percent up intraday.

According to the Financial Times, the 17 analysts projecting 12 month price targets for the FTSE 100-listed postal services firm, have a median target of 440.00p, with a high estimate of 675.00p and a low of 350.00p. As of 16 January 2015, the consensus forecast amongst 28 polled investment analysts covering Royal Mail has it that investors should hold their position in the company.

As of 11:06 GMT, Wednesday, 21 January, Royal Mail share price is 428.35p.