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).
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.