Rolls-Royce: stock up as broker more optimistic
14:25 30/08/2023
Rolls-Royce Holdings
(CercleFinance.com) - On Wednesday, Rolls-Royce shares were one of the biggest risers in the FTSE 100 index, boosted by an upgrade from AlphaValue, which said that it is more optimistic about the group following the arrival of a new CEO.
At 12:45 p.m. (London time), the engine-maker's shares were up 1.5%, while the FTSE index was up 0.4% at the same time, bringing its YTD gain to almost 135%.
In their morning comments, analysts at AlphaValue said they are reassured by the fact that Tufan Erginbilgic had taken up his post at the beginning of the year, which in their view raised the prospect of a forthcoming restructuring of businesses.
They also welcome the solid H1 results recently announced by the aeronautical equipment supplier, which came in above both its estimates and market forecasts.
'We believe that this performance is sustainable due to recovery in LEFH (currently at ~90% of 2019's level), improved and supportive contract terms (including inflation and indexation) and better cost control across all divisions', they add.
The broker now has an 'add' rating on the stock, upgraded from 'reduce' previously, while maintaining its target price of 244 pence.