Royal Mail Group PLC (LON:RMG) saw its shares fail to deliver again today, topping the FTSE 100 faller list on continuing disappointment at the loss of its blue chip status from next week, and amid strike concerns for the postal group.
In late afternoon trading, Royal Mail shares were 1.7%, or 6.5p lower at 385.9p.
In a note to clients today, analysts at Liberum Capital pointed out that “the risks of industrial action at Royal Mail are rising.”
READ: Potential for strike action over key Christmas period will hit Royal Mail’s profits, says UBS
They said: “The CWU, which represents the bulk of frontline staff, has been running an extensive grassroots campaign to build support for industrial action. We understand the union could propose a ballot for industrial action as early as tomorrow.”
The analysts added that, in their view, “the risks from industrial action lie predominantly in the likely modification of customer behaviour in the longer term, accelerating e-sUBStitution in letters and the loss of market share in parcels.”
They continued: “We also believe productivity improvements would be harder to deliver against an adversarial backdrop to industrial relations.”
Liberum repeated a ‘sell rating on Royal Mail shares with a price target of 385p.
Bernstein reportedly cuts target price
Meanwhile, another broker, US firm Bernstein International reportedly reduced its target price for Royal Mail shares today to 370 from 400p, maintaining a ‘market perfom’ rating on the stock.
At last week’s quarterly constituent’s review, indices complier FTSE International surprisingly announced the demotion of Royal Mail shares from the top flight to the FTSE 250 index with effect from the start of trading on September 18.
The stock has been a member of the FTSE 100 index since soon after its privatisation float in October 2013.