The IDS share price has been in a remarkable sell-off in the past few months as concerns about the company rose. Shares of International Distributions Service crashed to a low of 176.7p, which was the lowest level since September 2020. It has crashed by almost 70% from its highest level this year.
Royal Mail is now International Distributions Service
Royal Mail Group went through a major change this week as the company decided to change its name. The management believes that this change is important as the company transitions from focusing on mail to other logistics activities. For example, it is now one of the biggest players in parcel deliveries in the UK.
Also, its international business known as GLS has continued to play an important role in the business. As such, analysts believe that the change of name is part of the company’s strategy towards separating the two business.
Still, the company’s business is still growing through a rough patch. For one, the cost of doing business has continued rising in the past few months. At the same time, the company’s growth has slowed due to the falling demand for parcel and letter services.
The company will likely turn to a loss this year as it continues to negotiate with its employee about wages. Staff have warned that they will continue striking, including during the peak period of Christmas.
Meanwhile, according to The Telegraph, the company was forced to rush forward the monthly payment into its pension scheme to prevent a cash crunch. The crisis was caused by worries about Liability-Driven Instruments (LDIs) amid the market turmoil. The company’s pension plan has over 124k members and liabilities of more than 11 billion pounds.
IDS share price forecast
The weekly chart shows that the IDS stock price has been in a strong bearish trend in the past few months as concerns about the company continued. In this period, the stock has crashed hard below all moving averages and the 23.6% Fibonacci Retracement level. The Relative Strength Index (RSI) moved below the oversold level.
Therefore, despite the name change, the outlook for the Royal Mail share price is still bearish. If this happens, the next key support to watch will be at 150p. The stop-loss for this trade will be at 220p.