Analysts continue to back the shares of FTSE 100-listed Rolls-Royce Holdings PLC (GB:RR) despite the rally over the last year. In the last 12 months, RR stock has surged by nearly 120%, driven by its solid operational performance, recovery in the global aviation market, and an ongoing transformation program. Overall, analysts remain bullish on the company’s long-term prospects, as reflected in a Strong Buy rating on TipRanks.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Rolls-Royce is a British company that designs engines and power systems for the aerospace and defence industries.
Rolls-Royce Sticks to 2024 Guidance
Earlier this month, Rolls-Royce released its Q3 trading update, reaffirming its full-year guidance.
The company expects its underlying operating profit in 2024 to fall between £2.1 billion and £2.3 billion, up from £1.6 billion reported in 2023. Additionally, free cash flow is expected to range from £2.1 billion to £2.2 billion compared to £1.3 billion a year ago.
Insights from TipRanks’ Bulls Say, Bears Say Tool
According to TipRanks’ Bulls Say, Bears Say Tool, bullish analysts believe the sustained strength in Rolls-Royce’s profit and cash generation boosts confidence in meeting FY24 guidance.
Moreover, demand in the company’s Civil, Defence, and Power Systems segments is expected to stay robust. In its recent update, the company reported large engine flying hours increasing by 18% year-over-year, reaching 102% of pre-pandemic levels in the Civil Aerospace segment.
On the flip side, bears are concerned about the ongoing supply chain issues in the industry. Such issues are affecting the company’s engine production and maintenance timelines. However, the company is confident about achieving its targets despite this turbulence.
Recent Analyst Ratings Signal Confidence in RR Stock
Following its Q3 trading update, Rolls-Royce stock earned three Buy ratings from analysts. Specifically, analysts from UBS and J.P. Morgan maintained their Buy rating on the stock, predicting an upside of 18% and 21%, respectively.
Meanwhile, Goldman Sachs raised its price target on RR stock from 626p to 701p while confirming its Buy rating. Goldman’s new price target predicts a growth rate of almost 30% in RR share price. Goldman Sachs analyst Victor Allard stated that robust earnings growth has resulted in significant upward revisions in consensus for the coming years. Allard expects additional upgrades in the future. He also sees potential for increased shareholder returns, supported by a strong cash generation outlook.
Is RR Stock a Good Buy?
According to TipRanks, RR stock has received a Strong Buy consensus rating based on eight Buys and one Hold recommendation. The Rolls-Royce share price forecast is 626.50p, which is 15.6% higher than the current trading level.
