Credit Suisse has hiked its rating and price target on Rolls-Royce Holdings (LON:RR), arguing that the British engine maker is ready to move up a gear, Proactive Investors reports. The comments came after the FTSE 100 company updated investors on its ongoing restructuring last week, announcing plans to cut 4,600 jobs over the next two years and reporting that it is well-placed to exceed its 2020 free cash flow target.
Rolls-Royce’s share price fell in the previous session, giving up 2.38 percent to 927.40p and underperforming the benchmark FTSE 100 index which closed little changed. The group’s shares are up by about 3.6 percent over the past year.
Credit Suisse upbeat on Rolls-Royce
Credit Suisse hiked its rating on Rolls-Royce from ‘underperform’ to ‘neutral’ today, lifting its price target on the shares from 780p to 930p, arguing that the upgrade reflected the credible changes made to the company's structure. Proactive Investors quoted the broker as elaborating that the proposed modifications, outlined at the engine maker’s Capital Markets Day last week, should structurally modify how the company functions and its underlying profitability.
The broker further reckons that while one key risk of a highly decentralised structure was a loss of control, Rolls-Royce’s chief executive had dealt with that question “in a very reassuring and convincing way” at the analysts’ preparation.
Other analysts on British engine maker
The 17 analysts offering 12-month price targets for Rolls-Royce for the Financial Times have a median target of 930.00p on the shares, with a high estimate of 1,279.00p and a low estimate of 675.00p. As of June 18, the consensus forecast amongst 21 polled investment analysts covering the FTSE 100 group advises investors to hold their position in the company.