Royal Mail shares may have further to fall, Credit Suisse says

Credit Suisse said shares of Royal Mail Group may fall further after losing 31% of their value this year, in a note addressing “investor pushback” to its recent  ‘underperform’ rating on the stock.

“We think the market should be more concerned about the strength of the UK consumer,’’ analyst Hannah Burrows wrote in a note to clients.

Credit Suisse’s economist team are forecasting a 3% reduction in real consumer income this year, which may impact parcel volumes, she said.

In addition, the read-across from Deutsche Post DHL suggests that Credit Suisse’s expectations for the cost of Royal Mail’s fleet decarbonisation might be too low, wrote Burrows.

Credit Suisse has a target price of 345p, with the shares trading at 371.8p.