Business & Investment

Royal Mail Shares Soar: Is It Too Late To Buy Stocks?

The· Royal mail (LSE: RMG) Stock prices have really skyrocketed in recent months. Inventories have increased by 36% since the beginning of the year.

Over the past year, its performance has been even more impressive. Indeed, since the beginning of March 2020, equities have increased by 180%, excluding dividends. Slightly above Friday’s 462p, courier stocks are approaching a record high of 631p, which reached May 2018.

At this time last year, investors were abandoning the company because the pandemic seemed to have a devastating impact on the business. As a result, Royal Mail’s share price plummeted to a record low of about 124p.

But the exact opposite happened.Instead of ruining the group’s business, the pandemic Unexpected profit For the company.

Royal Mail faces this challenge. Management was able to act swiftly to renew the Group’s business, invest more in parcel delivery and operational efficiency, and meet consumer demand.

Without these changes, I don’t think the organization is in its current position.

Royal Mail stock price fluctuations

Over the past few years, Royal Mail has lost market share to smaller, more agile players in the shipping market. Unlike Royal Mail, which is obliged to serve all real estate in the UK, other companies can choose their market. For example, you can limit shipping to London to maximize profitability.

This is a challenge that Royal Mail can always face. However, the group has a great advantage over these companies. The brand is recognized and trusted nationwide, and most consumers know where the local post office is.

The government-owned post office Run independently In the case of Royal Mail, many consider them the same. For many consumers, it’s much easier to visit a local post office and send a parcel via Royal Mail than to figure out how to organize a collection from another company.

Consumers no longer need to go to the post office. Last year, Royal Mail introduced a parcel pickup service and a parcel post box. These initiatives helped streamline the entire customer process during a booming e-commerce market.

Challenge

A major challenge facing Royal Mail today is to sustain its growth. It’s hard to say if it can reach this goal. The group faces fierce competition in every way, and last year’s e-commerce boom may not last long.

Moreover, the relationship between the group and its workers has historically been very volatile. All of these are challenges that must be overcome as the business progresses. They also suggest that the company may abandon some of the progress it made last year in its new initiative.

Nevertheless, despite the challenges above, I buy stock in my portfolio today. I think Royal Mail’s business changed significantly in 2020, which in my opinion deserves a higher share price.

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Rupert Hargreaves does not have a position in any of the listed shares. The Motley Fool UK does not have a position in any of the listed shares. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by examining different insights, Better investors than us.

post Royal Mail Shares Soar: Is It Too Late To Buy Stocks? First appeared Motley Fool UK..

Royal Mail Shares Soar: Is It Too Late To Buy Stocks?

https://www.fool.co.uk/investing/2021/03/06/the-royal-mail-share-price-jumps-is-it-too-late-to-buy-the-stock/ Royal Mail Shares Soar: Is It Too Late To Buy Stocks?

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