Liberum stays at 'sell' on Royal Mail ahead of likely strike action
Liberum reiterated a 'sell' recommendation on shares of Royal Mail on the back of the downbeat guidance provided by the company and the risk of strike action.
The broker's analysts said that trading over the peak Christmas season - which coincided with the election - appeared to have been broadly in line.
Nevertheless, the company had described the outlook for year ending in March 2021 as "challenging", cutting its guidance for letters volumes by one percentage point to -7.0-9.0%, and cautioning of higher odds of a loss at its UK parcels, international and letters unit.
Given management's poor relationship with the union and looming strike action, the 2024 targets appeared to be at risk absent "significant" progress in implementing the company's strategy.
Liberum also stuck to a 175.0p target price for the stock.