Analysts at Hargreaves Lansdown reckon that Rolls-Royce Holdings (LON:RR) is a complicated business in transition and investors need to be patient, Citywire has reported. The comments came after the British engine maker updated investors on its interim performance this week, posting a rise in underlying core revenue, while also increasing the costs over its problematic Trent 1000 engines.
Rolls-Royce’s share price, which took a hefty fall after the engine maker’s half-year results earlier in the week, has surged in London this morning, having gained 2.96 percent to 751.60p as of 08:05 BST. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.49 percent higher at 7,233.99 points.
HL weighs in on Rolls-Royce
Citywire quoted Hargreaves Lansdown’s analyst George Salmon as commenting in the wake of Rolls-Royce’s results this week that the hundreds of millions pounds in impairments related to the group’s Trent 1000 engines and the £59 million of costs for the Trent 900 served as a ‘timely reminder’ that the British engine maker remained “an extremely complex business in transition”.
“However, those same complexities mean a few unwanted distractions in these results shouldn’t come as too much of a surprise,” the analyst pointed out, adding that there was still work to be done before it became a a simpler, more efficient, and dynamic business so investors “require a higher than usual degree of trust and understanding”.
Other analysts on engine maker
Goldman Sachs, which rates the British engine maker as ‘conviction-buy,’ lifted its target on the Rolls-Royce share price from 1,291p to 1,367p today, while analysts at Credit Suisse reaffirmed the FTSE 100 company as an ‘outperform,’ without specifying a valuation on the shares. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 1,105.78p.