Jefferies continues to see Rolls-Royce Holdings (LON:RR) as a ‘buy,’ arguing that the good news in the engine maker’s interim outdate outweighs the bad, Citywire reports. The comments came after the FTSE 100 group updated investors on its half-year performance yesterday, revealing that issues with its problematic Trent 1000 engines had impacted profits, while forecasting that its full-year profit and cash flow will come in at the upper end of its guidance.
Rolls-Royce’s share price has jumped in London this morning, extending the previous session’s gains, having added 2.60 percent to 1,085.50p as of 10:28 BST. The group’s shares are outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.48 percent higher at 7,612.11 points.
Jefferies sees Rolls-Royce as a ‘buy’
Jefferies reaffirmed Rolls-Royce as a ‘buy’ yesterday, with a price target of 1,100p on the shares following the group’s results which showed that the British engine maker had booked an exceptional charge of £554 million in relation to its Trent 1000 programme.
“We had some foreboding about the first-half results, not without some justification on Trent 1000 as it transpires, but our immediate reaction to the first half is that the Trent 1000 bad news is outweighed by good progress on the metrics that really matter to the equity story,” the broker’s analyst Sandy Morris commented, as quoted by Citywire, adding that Jefferies believed that the group’s drive to free cashflow of £1 per share was ‘well underway’.
Other analysts on British engine maker
Deutsche Bank, which sees Rolls-Royce as a ‘hold,’ lifted its price target on the shares from 880p to 900p today. According to MarketBeat, the FTSE 100 engine maker currently has a consensus ‘hold’ rating and an average price target of 969.92p.