That's the advice of broker Cantor Fitzgerald, which reckons the letters and parcels deliverer has plenty of work to do as the UK letter market declines sharply.
Costs are being contained and productivity is rising, but the privatised operator still needs to invest heavily in automation to boost service quality, efficiency and margins, the broker asserts.
Uncertainty is the name of the game, with the variety of forecasts in the market reflecting the many uncertainties around medium-term growth,
costs-of-change and capital expenditure.
The flotation proved wildly successful - or an absolute disaster, depending on your viewpoint - to the extent that what was pitched as an income stock has become a capital appreciation play.
Cantor Fitzgerald says that having risen from the flotation price of 330p to 570p, the stock's valuation and yield "are no longer compelling".
Royal Mail is trading on a multiple of 14.7 times projected current year earnings, versus a multiple of 12 for other postal companies.
Cantor Fitzgerald's projected dividend for 2014 puts the yield at 3.8%, which is a sub-par return for a FTSE 100 company. As a result, Cantor Fitzgerald has initiated coverage of the stock with a 'sell' recommendation and a target price of 500p.