Royal Mail Shares Buy or Sell? Share Price Forecast

September 22, 2021 23:48 UTC
Reading time: 11 minutes

Since the UK government established Royal Mail in 1516, it has been making headlines on a near-daily basis. The share price has gone through a wild ride since being floated on the London Stock Exchange in 2013 and the government selling its remaining shares in 2015.  

In this guide, we go through the facts and research you need to know when making a Royal Mail shares buy or sell decision, as well as how to invest in Royal Mail shares with low commission.  

Royal Mail Share Price Forecast - Buy, Sell or Hold? 

The price of Royal Mail Group (RMG) shares have gone through a turbulent time since going public in 2013. This has led to a range of different analyst calls adjusting their recommendations. While investors cannot solely rely on an analyst call (as they can also get in wrong), it can help to understand more about the sentiment regarding the stock.  

In general, analyst ratings can be of a few types: buy, hold, underweight, overweight and sell. By analysing the shifts in the number of analysts in each category it can help to recognise when something big is happening. After all, if more analysts started to shift from a sell rating to a buy rating, then there will be an underlying reason for that.  

So what are the current analysts saying about Royal Mail shares buy or sell? And, is RMG stock a buy? 

Source: FT.com, 15 September 2021 

Of the analysts offering 12-month price targets to the Financial Times, it's clear to see the shift from bearish to bullish forecasts. In October 2020, there were 2 sell and 3 underperform ratings on the stock.  

In September 2021, there are no analysts with a sell or underperform rating and there are now 4 with a buy rating compared to just 1 in October 2020. There are also now 7 analysts with an outperform rating.  

Royal Mail Share Price Forecast in 12 Months 

Of the 14 analysts providing 12-month price targets for Royal Mail, there is a median target of 632.50, with the highest estimate at 1,000.00 and the lowest estimate of 485.00.  

Source: FT.com, 15 September 2021 

It’s clear to see the more bullish forecasts that have developed over the past year. The median share price target of 632.50 represents the potential for significant upside considering September 2021’s Royal Mail share price was around 480.00.  

Of course, we know that markets don’t just move up or down in a straight line. The share price could easily fall further before it rises over the longer term. However, the underlying sentiment does help in knowing when to invest in the stock market over time.  

How to Buy Royal Mail Shares  

If you are interested in investing in Royal Mail shares then you can do so with Admirals from a variety of different account types, such as:  

1. Invest.MT5 Account. The Invest.MT5 account allows you to buy real shares and ETFs from 15 of the largest stock exchanges in the world.   

You can invest in Royal Mail shares with only 0.1% commission and a low minimum transaction fee of just 1 GBP!  

2. Trade.MT5 Account. The Trade.MT5 account allows you to buy and sell CFDs (Contracts for Difference) across 4,000+ financial instruments covering shares, commodities, indices and currencies.    

Trade long and short and potentially profit from rising and falling markets. With CFDs, you only speculate on the price movement of the stock rather than owning the underlying shares.   

Trade using margin. For most retail traders, you can open a position in Royal Mail using margin, which means you may only need 20% of the full investment to be held as a deposit to open the trade. Margin trading can amplify profits and losses, so be careful!  

3. Demo Account. You can open an Invest.MT5 and a Trade.MT5 demo account for FREE and test out all of the features for yourself until you are ready to go live.    

Step by Step Process on How to Buy Royal Mail Shares 

Follow this step by step process on how to buy Royal Mail Shares using the world’s most popular trading platform, MetaTrader 5 available via Admirals.  

  1. Login to the Admirals Trader’s Room, where you can access and manage all of your accounts for trading and investing. You can also access the Admirals Wallet and premium analytical tools.  
  2. Click on the Trade icon next to your live or demo account. This will then open the MetaTrader 5 web platform where you can type in Royal Mail in the last row of the Market Watch window on the left.  
  3. To view the Royal Mail share price chart simply drag the symbol (RMG) onto the chart. Here, you can perform technical analysis using different indicators and timeframes, all from your browser!
  4. To place a buy trade on Royal Mail open the trading ticket by right-clicking on the chart and selecting Trading, then New Order, as shown below.  If you're wondering how do I sell my Royal Mail shares you can also do that from this ticket by using the ‘sell’ icon.  

Source: MetaTrader 5 WebTrader provided by Admirals, 22 September 2021

Royal Mail Shares Dividend 

Since not everyone is an expert investor, we need to clarify the technical terms for a moment: in the field of investments and shares, "dividend" means the distribution of some of the earnings of a company to investors - determined by the company's board of directors.  

Dividends are paid in cash or in the form of additional shares, and dividend payment announcements are usually accompanied by a proportional increase or decrease in the stock price of the company.  

Unlike many other companies, Royal Mail has decided to pay its dividends instead of withholding them to reinvest them within the company. In 2021, the Royal Mail dividend was 10 pence GBP which represents a 33.33% increase from the year before.  

Even more interesting is the fact, most analysts believe the company will increase its dividend to 20 pence GBP over the next fiscal year.   

Royal Mail Shares Buy or Sell Research 

Royal Mail has gone through a huge transformation with the use of new technology and trying to keep up with the increase in demand for postal services due to online shopping. Investors have noticed as the stock price is now trading back towards its record high price level of around 633.00 but hasn’t quite broken through just yet.  

Since its all-time low of 116.00 in March 2020, the share price has surged more than 400% higher to the current 2021 high of around 613.00. So, what is behind the remarkable turnaround in Royal Mail’s share price? 

There are a variety of factors but the most obvious is the UK’s increase in demand for online shopping and parcel deliveries. In the year ending March 2021, the company posted pre-tax profits of £726 million with revenue up 16% to £12.6 billion. Most of this was attributed to the company’s parcels and letters business but more than £4 billion of revenue came from its European logistics business.  

Royal Mail Shares Buy or Sell Timing 

Did you know that through the Admirals Trader’s Room you can access the Technical Insight Lookup indicator in the Premium Analytics section?  

This indicator scans thousands of markets for actionable trading ideas. It scans for all the top technical analysis patterns and will let you know all the technical events taking place on a financial instrument.  

Source: Premium Analytics, 22 September 2021 

For example, the screenshot above shows a search for RMG (Royal Mail Group) in the Technical Insight Lookup indicator from the Admirals Trader’s Room Premium Analytics tab.  

At the time of writing, it is showing there are more than 18 technical events taking place on the share price of Royal Mail.  

It explains the technical analysis event taking place with a small chart to illustrate the findings.  

This is a great way to sharpen your technical analysis skills as well as save a huge amount of time trying to do your own technical analysis! 

Access this tool for FREE from the Admiral’s Trader’s Room today! 

Why Buy Royal Mail Shares with Admirals?  

✔️ Admirals is authorised and regulated by the UK Financial Conduct Authority (FCA) and other well-known financial regulators.  

✔️ Invest in real stocks and ETFs to build a long-term portfolio and a passive stream of income through dividend investing from the Invest.MT5 account!  

✔️ Enjoy a low commission of just 0.1% on UK stocks and a low minimum transaction fee of just 1 GBP! 

✔️ Access real-time, actionable investing ideas through the Premium Analytics Technical Insight Lookup indicator.   

Did you know that you can test ALL of these features by opening a FREE demo trading account?  

Click on the banner below and get started today! ▼▼▼  

INFORMATION ABOUT ANALYTICAL MATERIALS:   

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”). Before making any investment decisions please pay close attention to the following:   

  • This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.  
  • Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.  
  • With a view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for the prevention and management of conflicts of interest.  
  • The Analysis is prepared by an independent analyst (Jitan Solanki, hereinafter “Author”) based on personal estimations.  
  • Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.  
  • Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.  
  • Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved
Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.