Related Articles
| Jordan Dufee | |
| Senior Analyst |
Strategy published on : 01/06/2021 | 02:49
long trade
Live
Entry price : 360.1GBX
Target : 472.6GBX
Stop-loss : 295GBX
Potential : 31.24%
The underlying tendency is to the upside for shares in Royal Mail plc and the timing is opportune to get back into the stock. A comeback of the upward dynamic can be anticipated.
Investors have an opportunity to buy the stock and target the GBX 472.6.
● The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.
● In a short-term perspective, the company has interesting fundamentals.
Strengths
● Historically, the company has been releasing figures that are above expectations.
● The company is one of the most undervalued, with an “enterprise value to sales” ratio at 0.39 for the 2021 fiscal year.
● Upward revisions of sales forecast reflect a renewed optimism among the analysts covering the stock.
● Over the past year, analysts have regularly revised upwards their sales forecast for the company.
● For the past twelve months, EPS forecast has been revised upwards.
● For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.
● Within the weekly time frame the stock shows a bullish technical configuration above the support level at 227 GBX
Weaknesses
● The company does not generate enough profits, which is an alarming weak point.
● Prospects from analysts covering the stock are not consistent. Such dispersed sales estimates confirm the poor visibility into the group’s activity.
● Analysts covering the stock have recently lowered their earnings forecast.
● The three month average target prices set by analysts do not offer high potential in comparison with the current prices.
Source link
