Shares in Rolls-Royce Holdings (LON:RR) have fallen deep into the red in today’s session, as analysts at Deutsche Bank reiterated their ‘sell’ stance on the group, while lifting their valuation on the stock. The move comes ahead of the engine maker’s half-year results on August 1.
As of 14:38 BST, Rolls-Royce’s share price had lost 1.19 percent to 915.00p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.12 percent lower at 7,404.47 points. The group’s shares have added nearly 23 percent to their value over the past year, and are up by some 37 percent in the year-to-date.
Deutsche Bank reaffirmed Rolls-Royce as a ‘sell’ today, while lifting its price target on the shares from 525p to 570p. The move comes ahead of the engine maker’s interim update on August 1 and Sharecast quoted the analysts as saying that the focus will not be on the results per se, but on the group’s restated fiscal year 2016 numbers under the new IFRS15 accounting standard. The broker further expects Rolls-Royce’s cash flow targets for 2020 to attract attention, forecasting between £800 million and £1.5 billion.
For the engine maker’s half-year numbers, Deutsche Bank expects total top-line growth of 7.5 percent, with civil aerospace up eight percent and aftermarket by four percent. Sales at Rolls’ Power Systems unit are expected to have increased by 22 percent, but Marine would be a drag, with revenues down by 10 percent.
The 19 analysts offering 12-month price targets for Rolls-Royce for the Financial Times have a median target of 665.00p on the shares, with a high estimate of 1,180.00p and a low estimate of 480.00p. As of July 7, the consensus forecast amongst 22 polled investment analysts covering the blue-chip engine maker advises investors to hold their position in the company.