- Summary:
- JP Morgan Thinks that the Royal Mail Share Price Can almost double from the current level. We explain what to expect in the near term.
The Royal Mail share price has attempted to bounce back in the past few weeks. The RMG stock has risen to 445p, which is about 10% above the lowest level in October this year. It remains about 22% below its year-to-date high even as most analysts remain bullish on the stock.
Analysts are bullish on RMG
Royal Mail stock price has crashed hard this year. This decline is mostly because analysts expect that the company’s growth will start to stabilize as the UK economy reopens. Besides, the overall demand for online shopping is expected to drop substantially.
Investors have also been worried about the company’s cost structure. This is because wages have jumped substantially in the past few months. Also, the price of oil has risen in the UK, which means that the company will have relatively lower margins.
Still, analysts believe that the company’s shares are relatively cheap. Some of the bullish analysts believe that the company’s demand will be relatively strong even after the UK economy reopens.
In a recent note, analysts at JP Morgan placed their target for the Royal Mail share price to 804p. They are extremely overweight on the stock. Other analysts, such as those from Berenberg, Deutsche Bank, and Barclays expect that the shares will move to more than 500p. Data compiled by Yahoo Finance show that the average target for the stock is 644p.
Royal Mail share price forecast
On the four-hour chart, we see that the RMG share price has been in a relatively bullish trend lately. This is likely because of the relatively bullish statements from analysts. Now, the stock has managed to move above the 50-day volume-weighted moving average (VWMA). This is a positive sign.
Another positive sign is that the stock has formed a rising broadening wedge pattern, which is also a bullish sign. Therefore, there is a possibility that the price will keep rising as bulls target the key resistance level at 500p, which is about 7% from the current level. This view will be invalidated if it drops below 425p.
