Rolls-Royce share price rises as Credit Suisse lifts stance on group

Shares in Rolls-Royce Holdings (LON:RR) have climbed higher in London in today’s session, as Credit Suisse lifted its rating on the British engine maker. Proactive Investors reports that the analysts reckon that the company’s issues with its Trent 1000 engines ‘appear to be on the mend’.

As of 13:09 GMT, Rolls-Royce’s share price had added 2.93 percent to 940.40p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.53 percent higher at 7,171.15 points. The group’s shares have added more than 15 percent to  their value over the past year, as compared with less than a one-percent rise in the Footsie.

Credit Suisse lifts rating on RR

Credit Suisse lifted its rating on Rolls-Royce from ‘neutral’ to ‘outperform’ today, also hiking its price target on the shares from 900p to 1,050p. Proactive Investors quoted the analysts as saying that the Trent 1000 issues “had been the key execution impediment to the case and it now appears to be showing signs of improvement”.

“A technical fix for the main issue has been certified at the end of December 2018 and has just started to be installed on grounded engines,” the broker pointed out, adding that storage data showed “that the number of parked aircraft/engines has been reducing steadily for four months now, reducing the pressure on both airlines and Rolls-Royce”.

Credit Suisse noted that it was now more comfortable with Rolls-Royce’s ability to deliver on its 2020 free cash flow target of about £1 billion.

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 977.50p on the shares, with a high estimate of 1,250.00p and a low estimate of 765.00p. As of February 9, the consensus forecast amongst 19 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.

As of 14:09 GMT, Wednesday, 13 February, Rolls-Royce Holding PLC share price is 946.00p.