National Express share price: A useful guide

National Express Group PLC is one of the UK’s leading public transportation providers. It is a major player in the global transit industry, operating coaches, buses, and trains across the UK, Spain, and North America. National Express offers investors an opportunity to invest in an established brand with operations across multiple growing markets.

This article will provide an overview of National Express shares, including recent share price history, factors influencing share price, and how to invest in National Express shares.

National Express operations

National Express Group is organized into four divisions spanning three continents:

UK Coach: As the largest coach operator in the UK, National Express coaches serve over 900 destinations across the region. With a fleet of over 1,500 vehicles, it carries nearly 19 million passengers annually.

UK Rail: Through franchises with the Department for Transport, National Express operates intercity rail routes, including the East Coast Mainline. Its UK rail division serves over 300 stations carrying over 100 million passengers annually.

ALSA – Spanish Coach Operator: National Express’s Spanish subsidiary ALSA is Spain’s largest intercity coach operator. Connecting over 1,900 destinations across Europe and Morocco, ALSA has a market share of over 40% in Spain.

North America: National Express operates school bus and transit contracts across the United States and Canada. As a leading contractor to US municipalities, it serves over 1,400 vehicles.

National Express has solidified itself as a recognized international brand with a portfolio of operations across growing transportation and public transit markets.

National Express share price history

National Express Group PLC trades on the London Stock Exchange, with shares priced in British pounds. Over the past year, National Express share prices have been on a rollercoaster ride – seeing sharp gains and pullbacks across 2022 and 2023.

In December 2022, the National Express share price closed at £1.47. This marked a substantial pullback from 2021 highs, as rising fuel costs and economic uncertainty weighed on performance projections. However, the stock rallied in early 2023 on news of new European expansion contracts.

By January 2023, shares hit a 2-month high of £1.78. Unfortunately, this momentum was short-lived. In February, concerns over a potential recession in the UK drove a sharp sector-wide selloff in transportation stocks. By late February, the National Express share price fell to a 52-week low of £1.45 per share – down over 20% year-to-date.

Shares continued to stagnate heading into the summer months. Lingering macroeconomic issues capped the upside. The National Express share price traded between £1.40 and £1.08 per share by May and August.

In September 2023, the National Express share price fell again to new lows below £1.10. Disappointing interim financial results revealed how rising fuel inputs and falling passenger demand impacted margins. These worse-than-expected results prompted analysts to slash earnings forecasts.

Sentiment soured further in October as analysts highlighted the risk that the UK government could discontinue select regional rail contracts. This disruption in a key business line drove the National Express share price briefly below £0.70 – its lowest level in over a decade. Most recently, in December 2023, shares have witnessed a small rebound back to the £0.80-£0.90 range. This stabilization came following announcements of new cost-efficiency programs and strategic reviews of underperforming business units.

While still far below 2021 highs, National Express shares appear to be finding a bottom following almost 18 months of declines. Whether the stock can maintain this higher range depends significantly on the company’s ability to navigate the difficult macroeconomic climate over the coming quarters.

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Why is the National Express share price dropping?

The prolonged decline of the National Express share price has been driven by a confluence of factors impacting financial performance:

Economic conditions

Slowing economic growth and high inflation in the UK and Europe have resulted in falling passenger demand. Fewer business and recreational travellers have translated to reduced coach and rail ticket sales. This lower revenue has magnified margin impacts from higher fuel costs.

Fuel costs and margins

National Express earnings are highly sensitive to fuel prices as a transportation provider. The sharp rise in gasoline and diesel prices over the past 18 months has reduced profit margins. Despite fuel hedging programs, the magnitude of fuel inflation has hurt bottom lines.

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Government policy

Many National Express revenue streams depend on government contracts for public transportation services. Cuts in transportation budgets and reductions in rail subsidies have negatively impacted these revenue streams.

Industry competition

Budget coaches and bus operators have also intensified competition. These low-cost options have attracted some cost-conscious travellers during the economic slowdown. Lost market share has further dampened National Express’s earnings outlooks.

Collectively, these headwinds have forced analysts to downgrade earnings expectations - sending shares lower for an extended period.

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How do I buy shares in National Express?

For investors who believe National Express shares are oversold, here are three straightforward ways to invest:

Online share dealing account

Opening a share dealing account with an online broker allows trading company stocks directly. Simply search for National Express and enter the desired number of shares. This route offers full control over your investment.

Stocks and Shares ISA

UK residents can open an Individual Savings Account (ISA), allowing £20,000 per year in tax-free investments. Many online ISAs include the ability to purchase individual company shares like National Express. Using an ISA provides tax relief on returns.

Managed funds

Alternatively, managed mutual funds and ETFs provide exposure to National Express stock through a diversified portfolio. This enables investing in the company without picking individual stocks. Managed funds also provide professional oversight and rebalancing.

In a nutshell

The National Express share price has faced significant headwinds over the past couple of years, driven by economic weakness and margin pressures from high inflation.

While challenging operating conditions have weighed heavily on recent performance and earnings expectations, National Express remains a leading transportation provider across Europe.

For traders interested in gaining exposure to this established company, it is always wise to conduct further research before investing.

Investors must also choose a trading platform with reputable years of experience helping professional traders and beginners. Choose a platform that suits your needs.

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“When considering “CFDs” for trading and price predictions, remember that trading CFDs involves a significant risk and could result in capital loss. Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be considered investment advice.”