Jefferies continues to see Rolls-Royce Holdings (LON:RR) as a ‘buy,’ arguing that the group’s update should at least reassure investors, Citywire reports. The comments came after the blue-chip engine maker said yesterday that it expects its full-year cash flow and profits to come in at the upper end of its guidance.
Rolls-Royce’s share price rallied in the previous session, gaining 4.51 percent to close at 816.00p, outperforming the broader UK market, with the benchmark FTSE 100 index ending trading 1.08 percent higher at 6,880 points. This morning, the shares have built on gains, having added 0.22 percent to 817.80p as of 08:02 GMT, as compared with a 0.40-percent rise in the Footsie.
Jefferies weighs in on Rolls-Royce after latest update
Jefferies reaffirmed Rolls-Royce as a ‘buy’ yesterday, with a price target of 1,100p, following the group’s trading update.
“Rolls-Royce states it has continued to make progress in reducing original equipment losses and points to progress towards a resolution of [aircraft engine] T1000 in-service issues,” the broker’s analyst Sandy Morris commented, as quoted by Citywire. “Without donning our rose-tinted spectacles, we believe the trading update should at least reassure.”
FTSE 100 group in talks with Airbus over Brexit plans
In a separate development, The Times reported this morning that Rolls-Royce was in talks with Airbus to use the aircraft maker’s whale-shaped Beluga transporter planes to deliver its engines to final assembly sites on the Continent in the event of a disorderly Brexit. The aircraft could allow the FTSE 100 group to avoid any disruption at sea ports after a no-deal Brexit.
Rolls-Royce said in yesterday’s update that, as part of its Brexit contingency plans, it was working with the European Aviation Safety Agency to transfer design approval for large aero engines to Germany, where the company already carries out this process for business jets.