The share price prospects of Royal Mail PLC (LON:RMG) (RMG.L), Taylor Wimpey plc (LON:TW) (TW.L), Barratt Developments Plc (LON:BDEV) (BDEV.L) and Rolls-Royce Holding PLC (LON:RR) (RR.L) are the focus of this article. Could they generate impressive total returns in the long run?
Royal Mail is expected to put in place a refreshed strategy over future months in response to its recent profit warning.
I feel that the company could have a growth opportunity internationally. Its GLS division has been able to generate impressive volume growth in recent quarters, and further investment could help to strengthen this trend. With a 5%+ dividend yield, I’m optimistic about Royal Mail’s long-term turnaround potential.
Taylor Wimpey’s shares now have a single-digit P/E ratio and a double-digit P/E ratio following a challenging period for the stock. Investors seem to be uncertain about the outlook for the UK economy and the wider housebuilding sector ahead of Brexit.
This trend could continue in my view, but in the long run I believe that Taylor Wimpey’s net cash position, large land bank and apparent margin of safety could help the FTSE 100 company to generate improving share price performance.
Rolls-Royce’s recent share price performance has been relatively volatile. Concerns about the outlook for the global economy appear to have caused investors to demand a margin of safety, with it having the potential to cause a slowdown in demand for a variety of the company’s products.
With the defence industry set to benefit from rising military spending in a variety of regions, I’m optimistic about Rolls-Royce’s share price prospects. I feel that it has a sound strategy and an improving business model which could benefit from its cost reduction strategy.
Barratt’s share price prospects may be relatively volatile in the near term as the Brexit process moves ahead. But in the long run I feel that the company could deliver an impressive turnaround.
Since there is a fundamental shortage of new homes when compared to demand, I feel that the housebuilding industry could benefit from a tailwind in future years. This could boost Barratt’s financial performance, while its current valuation suggests to me that there may be a margin of safety on offer.