Royal Mail (LON:RMG) has received a near 70% downgrade to its profits forecast from UBS, though the Swiss Bank suggests all the bad news might all now be priced in.
UBS sees downside given the UK division's low historical margins, challenging environment for growth and difficult relationship with its main union, the CWU.
Kwasi Kwarteng’s mini-Budget might also keep inflationary pressures higher for longer, while overseas business GLS is also facing pressure on volumes due to the impact of the cost of living crisis across Europe.
The bank’s underlying profit forecasts for the three years through March 2023 -2025 have been slashed by respectively 97%, 85% and 39% with UBS also predicting no dividend this year,
UBS has chopped its price target to 205p from 280p.though the investment rating remains at 'neutral' given the possibility that all of the headwinds are priced in.
Shares rose 0.7% to 197.3p.