UBS remains bullish on Rolls-Royce Holdings (LON:RR), having made limited changes to its overall free cash flow estimates following the engine maker’s results, WebFG News reports. The comments came after the FTSE 100 company said last week that it had booked an exceptional charge of £554 million in relation to its Trent 1000 programme.
Rolls-Royce’s share price has slipped into the red in today’s session, having given up 0.82 percent to 1,085.05p as of 14:43 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.19 percent lower at 7,644.57 points. The group’s shares have added more than 14 percent to their value over the past year, as compared with a near two-percent gain in the Footsie.
UBS still bullish on Rolls-Royce
UBS reaffirmed Rolls-Royce on Friday, with a price target of 1,130p on the shares, noting that the variability of aerospace profit ‘remains high’ under the IFRS 15 accounting rules.
“In 2H18 we would expect good cash inflow from PS, and a small cash positive in civil. Trent 1000 is a large drag, which we think the market will strip out once stabilised,” the analysts pointed out, as quoted by WebFG News, adding, however, that they believed that the market was “not yet comfortable enough with the 787 to treat it as a one-off”.
Other analysts on engine maker
The 16 analysts offering 12-month price targets for Rolls-Royce for the Financial Times have a median target of 1,010.00p on the shares, with a high estimate of 1,279.00p and a low estimate of 675.00p. As of August 3, the consensus forecast amongst 20 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.