National Express Share Price Forecast December 2021 – Time to Buy NEX?
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Shares of British multinational public transport company National Express (LSE: NEX) are in the red today, currently trading at 234.4p. The shares of NEX are still below its pre-pandemic price, in spite of making a decent recovery in 2020. However, the company is experiencing an increase in demand in both Spain and North America.
National Express – Technical Analysis
The financial statement of National Express indicates that it has a market cap of £144.349 billion with total assets worth £428.52 billion. Revenue for 2020 was at £195.59 billion with a profit margin of -16.96% compared to £274.44 billion in 2019.
Oscillators for National Express such as Relative Strength Index (14)(52.6 ), Stochastic %K (14, 3, 3)(70.4), Commodity Channel Index (20)(47.6), Average Directional Index (14)(12.6) and Awesome Oscillator(4.6) are neutral. Moving averages such as Exponential Moving Average (10)(230.8), Simple Moving Average (10)(229.1), Exponential Moving Average (20)(229.6), Simple Moving Average (20)(227.4) and Exponential Moving Average (30)(230.0) are indicating a buying action.
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Recent Developments
National Express was formed in 1972 when the state-owned National Bus Company decided to bring together the scheduled coach services. They were till then operated by its bus operating companies in the United Kingdom under one brand.
National Express’ revenue was down by 3.8% for the first half of this year and it continues to make a statutory loss. However, there are clear signs of recovery as the statutory loss has reduced to around a quarter of its levels last year. While it’s still loss-making, the company reported a small underlying post-tax profit. After reporting a loss of £61 million during the first half of 2020, the company’s return to profitability is a significant improvement.
The company’s half-year trading update indicated an operating loss of £24.1 million eventhough parts of the business has managed to re-reach profitability. For instance, ALSA (in Spain) and the company’s operations in North America have enjoyed great success. The company is now operating at 56% of pre-Covid levels, up from 37% at the end of June.
The biggest news regarding National Express in recent months was the proposed merger with Stagecoach Group announced on 21st September. While the shares of both the companies swelled when the news first broke out, they have since drifted. Both the companies now must make a decision before 14th December. The merger has some clear advantages such as office space and staff, cutting down on duplicate routes, and adding buying clout for future expansion plans.
However, there are many negatives of this move as well. There is impending fear of another lockdown that can impact the company, as well as the upward travel of the price of fuel which is expected to reach above $100. Without the pandemic, recent trends have indicated that customers will still feel reluctant now to travel by shared means, sitting next to strangers.
Should You Buy NEX Shares?
The pickup in demand for the coach operator has surprised many and should interest investors as well. For Q3 of 2021, National Express Group has recorded increased revenues of 83% on the same period as 2019. As things return to normal, many believe that the recovery will continue into 2022. The company is well-positioned to combat climate change for the future as a more eco-friendly way of travelling than cars. Despite risks associated with Covid, investors can add NEX shares to their portfolios.
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