Rolls Royce full-year results: where now for the share price?
The British engineering company’s share price has been on a downward trajectory since February 2019, with analysts mixed about the stock ahead of its full-year results on Friday.
Rolls-Royce's share price has been steadily falling since February 2019, with the company expecting its full-year operating profit and free cash flow to come in at the lower end of its guidance on Friday, reflecting increased costs due to issues with its Trent 1000 engine.
Faults associated with the Trent 1000 engine, which was built for Boeing’s 787 Dreamliner, first emerged in August 2018, forcing airline carriers like Virgin Atlantic and British Airways to ground planes.
Over the last 18 months, costs associated with engine have eaten into the company’s profits, with total in-service cash costs expected to be around £2.4bn between 2017-2023.
The British engineering company has seen its share price fall by more than 37% over the last 12 months, with the stock closing at £6.16 on Wednesday.
Goldman Sachs upbeat about Rolls Royce ahead of full-year results
Despite the company’s struggles, analysts remain mixed about the stock. Earlier this month, analyst from Goldman Sachs reiterated their ‘conviction buy’ rating for Rolls Royce and upgraded their target price for the stock to £11.91 a share.
However, analysts from its US-based counterpart JP Morgan Cazenove are sceptical about the stock, reiterating their ‘underweight’ and issuing a target price of 485p.
Based on Rolls Royce closing at £6.16 a share, analysts from Goldman Sachs believe the stock has a potential upside of 93.3%, while JP Morgan Cazenove think the stock will continue to fall by as much as -21.3%.
Rolls Royce will unveil its full-year earnings on 28 February (Friday).
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get commission from just 0.08% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets