The ‘turnaround is intact’ at Royal Mail PLC (LSE:RMG), according to Barclays Capital, which reiterated its ‘overweight' recommendation and 550p a share price target.
The investment banking arm of the high street lender said the “valuation looks compelling”.
This, coupled with the and "significant turnaround opportunity" and "pricing potential" of the post and parcels business could offset cost inflationary pressures that might peg the company back.
The factors also underpinned Barclays’ above-consensus earnings (EBIT) forecasts.
Pre-tax profit from the group is predicted to grow by a consensus 10% in 2021.
Of the 15 brokers and banks covering the stock, 10 are positive and only one has a ‘sell’ recommendation.
The median valuation is 659p a share. In early afternoon trading, the stock was changing hands for 414p, meaning the price would have to advance 45% to hit that level.