Rolls-Royce Holdings (LON:RR) has secured a contract to maintain the nuclear engines of the UK’s fleet of submarines, the BBC has reported. The news comes ahead of the British engine maker’s full-year results this Thursday.
Rolls-Royce’s share price fell in the previous session, giving up 0.43 percent to 977.60p, underperforming the broader UK market, with the benchmark FTSE 100 index gaining 5.14 points to close 0.07 percent higher at 7,183.74. The engine maker’s shares have added more than 18 percent to their value over the past year, as compared with about a 0.8-percent dip in the Footsie.
Rolls-Royce lands £235m deal
The BBC reported yesterday that Defence Secretary Gavin Williamson had confirmed a £235-million contract to maintain the nuclear engines of the UK’s fleet of submarines while visiting Rolls-Royce's Raynesway plant in Derby. The deal covers systems on the Trafalgar, Vanguard and Astute class subs until 2022, securing about 500 jobs, mostly in Derby.
“Rolls-Royce plays a critical role in supporting our submarines and I'm pleased this contract will help sustain 500 highly-skilled jobs that help protect our country,” Williamson pointed out, as quoted by the newswire.
Analysts on blue-chip group
The 16 analysts offering 12-month price targets for Rolls-Royce for the Financial Times have a median target of 1,022.50p on the shares, with a high estimate of 1,250.00p and a low estimate of 765.00p. As of February 23, the consensus forecast amongst 19 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.
Credit Suisse lifted its rating and price target on the British engine maker earlier this month, arguing that the company’s issues with its Trent 1000 programme ‘appear to be on the mend,’ and that it was now more comfortable with Rolls-Royce’s ability to deliver on its 2020 free cash flow target of about £1 billion.