The Royal Mail share price is in the spotlight today as investors react to the rising demand for the company’s services. The share price has already risen by more than 300% from April last year. It has risen by more than 40% this year, becoming one of the best-performing companies in the FTSE 250.
What happened: Royal Mail has been a key beneficiary of the pandemic since demand for parcels has bounced back. In fact, the company’s revenue jumped by a fifth in the third quarter of last year. It delivered 496 million parcels in the fourth quarter and is currently building a new parcel logistics hub in Daventry. Analysts expect that it will report relatively strong full-year numbers.
Yesterday, the company said that it will begin to test Sunday delivery as it tries to cope with the rising demand. In a statement, the company said:
“The UK already trusts us to deliver their purchases six days a week both quickly and conveniently. Now, for the first time, our posties will be doing the same thing seven days a week.”
Still, there are concerns about whether the demand for Royal Mail services will keep rising as the number of cases continue to decline.
Royal Mail is not the only logistics company to report strong earnings. This week, Deutsche Post announced strong earnings and predicted that its operating profit will rise to $5.8 billion. In the United States, the USPS has reported its first profit in years while UPS and Fedex have reported strong results.
Royal Mail share price prediction
The four-hour chart shows that the RMG share price has been in a strong upward rally recently. Notably, the shares have recently moved above 488p, which was the previous YTD high. A closer look shows that the stock has moved above the handle part of the cup and handle pattern. It also remains above the 50-day and 25-day moving averages.
Therefore, since the cup and handle pattern is usually a bullish continuation pattern, there is a possibility that the Royal Mail share price will keep rising.
RMG share price chart