Shares in Rolls-Royce Holdings (LON:RR) have fallen deep into the red as an Iberia flight from New York to Madrid was forced to divert to Boston due to problems with one of the FTSE 100 group’s Trent XWB engine, according to media reports. The news marks a blow for the company which has been struggling with problems with its Trent 1000 engines.
As of 14:36 BST, Rolls-Royce’s share price had given up 1.25 percent to 962.80p, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.40 percent higher at 7,302.37 points. The group’s shares have added more than seven percent to their value over the past year, as compared with about a 1.5-percent dip in the Footsie.
Rolls-Royce under pressure
Rolls-Royce’s shares have come under pressure after an Iberia flight from New York to Madrid was forced to divert to Boston 90 minutes after departure due to a technical failure with a Trent XWB engine. The Telegraph reported that traders feared the issue could signify bigger problems for the company than it has so far identified.
The Financial Times quoted a spokesperson for the British engine maker as saying that the group was “aware of the issue and will be working closely with the airline to support them”.
“The Trent XWB has enjoyed the smoothest entry into service of any widebody engine and we continue to see the engine achieving market-leading levels of reliability,” the spokesperson pointed out.
Analysts on engine maker
The 15 analysts offering 12-month price targets for Rolls-Royce for the Financial Times have a median target of 1,030.00p on the shares, with a high estimate of 1,266.00p and a low estimate of 675.00p. As of September 7, the consensus forecast amongst 20 polled investment analysts covering the blue-chip engine maker advises investors to hold their position in the company.