Royal Mail share price found its way into the FTSE 100’s losers chart after it warned that the easing of lockdowns across the UK was affecting its parcels business.
The bearish momentum in Royal Mail share price has been accentuated by various analyses provided by banks and research teams, which see monumental headwinds to the stock despite the improved earnings figures. Analysts at Liberum classify the stock as a “hold”, citing concerns over whether the revenue trends of the agency would stabilise post-COVID.
Analysts at Berenberg are even more pessimistic, opining that the stock has a “highly uncertain” outlook. The brokerage also notes with concern that the recent earnings numbers provide little clarity on the future direction of the stock.
Royal Mail had reported a growth of 12.5% in the March to June quarter of 2021 compared to the same period in 2020. However, it provided negative forward guidance on the revenue growth of its parcel business due to eased lockdown restrictions.
Technical Levels to Watch
The 3-day decline in Royal Mail share price is aiming for a retest of 509.6 (11 May and 21 July lows), with 490.6 and 480.0 (1 April low) being the immediate targets for the bears if the support at 509.6 breaks down.
On the flip side, a bounce on the 509.6 support could allow for fresh demand to send the stock towards 531.8. If the upside break occurs at that point, there is leeway for 555.0 (24 May high) to become the next barrier to the north, after which 571.6 comes into the picture.