National Express Group Stock Price Prediction September 2021 – Time to buy NEX?
Shares of the British multinational public transport company National Express Group (LSE: NEX) are in the green today, having closed at 240p on September 21st (18:43 UTC + 1). The coach service provider that is part of the FTSE 250 is reportedly in the process of merging with transport operator Stagecoach.
National Express Group – Technical Analysis
According to National Express Group financial statement, the market capitalization of the company is £ 1.367 billion with total assets worth £ 4.285 billion. Revenue for 2020 was £ 1.96 billion with a profit margin of -16.96% compared to £ 2.74 billion in 2019.
Moving averages for National Express Group such as exponential moving average (100) (262.6), simple moving average (100) (269.5), exponential moving average (200) (264.5), and average simple mobile (200) (276.7) indicate a sell action. On the other hand, oscillators such as the relative strength index (14) (47.3), the stochastic% K (14, 3, 3) (28.8), the commodity channel index (20 ) (−11.8) and the mean directional index (14) (35.2) are mostly neutral.
67% of all retail investor accounts lose money when trading CFDs with this provider.
National Express has made immense strides in securing contracts worth £ 900million in what many have described as a ‘bad’ year for business. The contracts include multi-year contracts for markets in Portugal, an employee shuttle contract in the UK and school bus contracts in North America. There are 29 electric buses in its fleet in the West Midlands in England. The company has also been awarded a contract to provide hydrogen bus services to Birmingham, which is expected to start later this year. The company is on track to achieve zero carbon emissions by 2030.
The biggest news from National Express Group right now is the merger with Stagecoach. Stagecoach investors will receive 0.36 National Express shares for each share held under the terms of the proposed agreement. Shares of both companies rallied on the news at very troubling times for the global travel industry. While shares of National Express Group rose 707%, diligence posted larger gains at 21% since yesterday.
Persistent uncertainty over the pandemic has kept National Express Group shares from skyrocketing. Its share price has fallen by 21% in the past 6 months. Company’s operating results improved for the six-month period ended June 30e compared to the same period before. However, revenues remained stable due to the cost saving measures. The £ 35million merger with diligence may result in additional cost savings. National Express Group expects nearly a third of these to come from areas such as back office processes and other IT-related duplicate costs.
Should you buy NEX shares?
As good as the above news looks, there are some risks that investors should consider as well. Stagecoach has been a business in decline for years now. National Express will also need to strive to reach pre-pandemic levels. However, the decarbonisation of its transport system by the UK will require public transport to play a major role. This suggests that the demand for the company’s services will only increase in the long run.
NEX shares may not be suitable for all investors. Its resumption is only in its early stages which could be postponed by several months if a new containment is announced. Rising wages and fuel costs may also hamper its recovery. The best thing for National Express investors right now would be to hold onto their shares until the merger is clearer. Considering all of this, now is not the time to buy NEX stocks.