PostNL Urgent regulatory changes were needed yesterday
Following the FY24 results, we have significantly lowered our normalized EBIT estimates for 2025 and 2026 by respectively 33% and 43%. Our new estimates assume that the mail segment will become loss making in 2025, only returning to profitability by 2027. However, in order to restore mail profitability, a change in the postal act will be needed. Any delays to these changes could be considered a risk for the stock, while the opposite is true for temporary measures or financial compensation from the Dutch government. We reiterate our Hold but lower our TP from € 1.4 to € 1.0ps.PostNL is a mail, parcel and e-commerce corporation with operations in the Netherlands, Germany, Italy, Belgium, and the United Kingdom. Co. has been assigned by the Dutch government to carry out the UPD (Universele Postdienst, Dutch for Universal Postal Service). Carrying out the UPD requires, amongst other things, Co. to deliver mail throughout the Netherlands five days a week (Tuesday through Saturday) and to maintain enough mailboxes in the country. ACM is charged with monitoring and enforcing the execution by Co. Co.'s operations are organized along three business segments: Mail in the Netherlands; Parcels; and International. Co. maintains over ten networks across thirteen countries.
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