Shares of the FTSE 100-listed Rolls-Royce Holdings PLC (GB:RR) dropped nearly 3% as of writing after Citi analyst Charles Armitage downgraded his rating from Buy to Hold. Nonetheless, Armitage increased the price target on the stock from 555p to 641p, projecting a growth rate of 13%. In 2024, RR stock grew by an impressive 90.7%, capturing second place among the top performers of the FTSE 100 index.
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Rolls-Royce specializes in designing engines and power systems for the aerospace and defense sectors.
Citi Sees Modest Growth for RR Stock
Citi believes that the stock is approaching its fair value after a strong recovery since the pandemic and predicts modest growth. Although the target price has been raised, suggesting some growth potential, Armitage noted that the expected upside is not enough to justify a Buy rating.
Meanwhile, investment platform AJ Bell’s Russ Mould stated that Rolls-Royce has been a favourite among investors in recent years, driven by its recovery. However, the turnaround story now seems to be behind it, and investors are more focused on the next phase of the company’s growth.
TipRanks Offers Analyst Rankings
According to the TipRanks’ ranking, Armitage is a five-star-rated analyst. He ranks 585 out of more than 9,000 analysts on TipRanks. He has a success rate of 74% and has delivered an average return of 19.2% per rating.
Through Star Ranking, TipRanks tracks the performance of financial experts, evaluating them based on their success rate, average returns, and statistical significance. This helps users discover and follow top financial experts while assessing their performance on particular stocks.
Insights from TipRanks’ Bulls Say, Bears Say
TipRanks’ Bulls Say, Bears Say tool provides a summary of analyst opinions on Rolls-Royce stock, showcasing both positive and negative perspectives. In general, analysts continue to have a very positive outlook on the stock.
Bulls continue to trust in the company’s ability to meet its guidance, backed by solid profit and cash flow growth, along with strong demand across its sectors.
On the other hand, bears remain wary due to ongoing supply chain challenges in the industry and regulatory hurdles.
What Is the Stock Forecast for Rolls-Royce?
Despite the rating downgrade by Citi, RR stock still holds a Strong Buy rating on TipRanks backed by six Buy and two Hold recommendations. The Rolls-Royce share price forecast is 661.81p, which is 15.62% higher than the current trading level.
