FirstGroup Share Price Forecast July 2021 – Time to Buy FGP?
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Shares of public transport service provider FirstGroup (LSE: FGP) are in the green at the moment of writing (July 28 11:40 UTC+1) as the price has been rising continuously for a week. It makes investors wonder if this is the right time to buy FGP shares.
FirstGroup – Technical Analysis
According to the financial statement of FirstGroup, the company has a market cap of £1.018B with total assets worth £8.683B. The revenue of the company was £7.75B in 2020 compared to £7.13B in 2019. At the moment of writing, the market is open at £87.55 with an uptrend of 4.18%.
The technical information of FGP offers more insight. Moving Averages such as Exponential Moving Average (10)(82.62), Simple Moving Average (10)(80.49), Volume Weighted Moving Average (20)(82.55), and Simple Moving Average (20)(82.61) are pointing towards a buy action. On the other side, Oscillators like Momentum (10)(6.60) and MACD Level (12, 26)(0.20) are also pointing towards buying, while Stochastic RSI Fast (3, 3, 14, 14)(99.54) and Williams Percent Range (14)(-8.84) are being neutral.
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Recent Developments
Founded on March 31, 1995, in Paddington, the United Kingdom, FirstGroup is a passenger transport services provider. It operates through five segments: First Student, First Bus, First Transit, First Rail, and Greyhound. The First Student segment offers transportation to North American students. The First Bus segment operates buses in the United Kingdom outside London. The First Transit segment provides contracting services and public transit management in North America. The First Rail segment operates and manages rail transportation with the open access system. The Greyhound segment operates intercity coach transportation services in Canada and the United States.
On July 27, 2021, FirstGroup revealed that Chief Executive Mathew Gregory is going to step down in September, after the annual shareholder meeting of the company on September 13. It was announced a day after the biggest shareholder of FirstGroup demanded his resignation regarding a sale. The shareholder U.S. fund Coast Capital owns approximately 15% share of FirstGroup and they opposed the recently completed sale of First Student and First Transit Business to EQT EQT, a Swedish group. According to the shareholder, the price was very low. However, Gregory stated that his resignation was not linked to the demands of Coast Capital.
On the same day, the company also announced that FY21 has been fruitful with profits despite lower passenger volumes due to Covid-19 travel restrictions. For the FY20 Q2, profit attributable to shareholders totalled £78.4M or £0.064 per share which was a loss of £327.2M or £0.27 per share last year. Meanwhile, the revenue remained stable for the year at £4.64B. FirstGroup expects to commence dividend payments during the fiscal year 2023. Looking ahead, the company notices bus passenger volumes reaching 80%-90% of the pre-pandemic level in the first year after social distancing restrictions are lifted from public transport.
Should You Buy FGP Shares?
As an investor, you must consider your risk-reward points before investing in a share. FGP shares are soaring high at the moment as the company is making profits as well. Even though FirstGroup suffered from the pandemic, it has jumped back to business quite well. Moreover, the technical indicators are giving strong buy signals. All Moving Averages and most Oscillators are pointing towards buying, while some Oscillators are being neutral. So, this may be the right time to purchase FGP shares for high returns in future.
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