Royal Mail Share Price Forecast Ahead of Earnings

Summary:

In this Royal Mail share price forecast, we look at what to expect in the near term ahead of the company's full year earnings.

The Royal Mail share price is hovering near its highest level since May 2018 ahead of its full-year earnings that will come out on Thursday this week. The RMG stock is trading at520p, which is below the year-to-date high of 530p.

Royal Mail earnings: Royal Mail is the leading letter and mail delivery company in the UK. Its stock has surged in the past few months as investors’ price in recovery as the demand for parcels rose. This has seen its stock soar by more than 300% from its lowest level last year.

However, in the past two months, the shares have gone nowhere as investors start worrying about the company’s growth as the country reopens. There are also worries about competition from traditional companies and newer ones like Hermes and Yodel, among others.

Therefore, while investors expect the company to publish strong results on Thursday, there are lingering concerns about its forward guidance. Recently, companies in the delivery industry like FedEx, UPS, and Deutsche Post recorded strong results. However, their shares have struggled because of lack of clarity about what will happen later this year.

Royal Mail share price analysis

The daily chart below shows that the RMG share price has found a strong resistance at its YTD high. The stock has even formed what looks like a flat-top or ascending triangle pattern. It has also rallied above the 50-day and 25-day exponential moving averages (EMA).

The Relative Strength Index (RSI) has also formed a bearish divergence pattern. Therefore, there is a possibility that the stock will see a bullish breakout after it reports its earnings. However, looking forward, the stock could retreat as investors price in potential slowdown as the UK reopens.