Rolls-Royce shares set to rebound on Covid-19 vaccine hopes

Rolls-Royce shares are mounting a recovery after hitting a low of 38p in October, with investors’ confidence in the business buoyed by Pfizer’s Covid-19 vaccine and the company’s role in a new nuclear power project.

  • Rolls-Royce shares have been in freefall in 2020 amid the Covid-19 pandemic
  • The British engineering company saw its shares fall as much 80% to a low of 38p
  • Rolls-Royce shares mount recovery due to new nuclear deal and Pfizer’s Covid-19 vaccine

Rolls-Royce shares have begun to mount a recovery after hitting a low of 38p in early October, with investors’ confidence in the business buoyed by Pfizer’s Covid-19 vaccine and the company’s leading role in a new nuclear power deal that will create 6000 UK jobs.

The British engineering company’s shares have climbed more than 150% since hitting a low of 38p per share in early October, with the stock still miles away from where it was trading (233p) prior to the coronavirus outbreak.

Rolls-Royce is trading at 100p per share at the time of publication, with the stock down 56% year-to-date.

Rolls-Royce led consortium secures nuclear power deal

A consortium of businesses led by Rolls-Royce announced on Wednesday that it could create 6000 new jobs in the UK within the next five years if the government commits to a plan to create 16 mini nuclear power stations.

The UK SMR consortium said that up to 80% of the power stations’ components would be made in factories in the Midlands and Northern England and the nuclear power station project would generate another 34,000 jobs by the mid-2030s with most workers employed in high-value manufacturing.

Last year, the UK government has gave £18 million to the consortium to design the nuclear reactors, with that figure matched by UK SMR. The consortium is now seeking further £217 million from government coffers which it will match to push move forward with the next phase of the project.

The project will support Rolls-Royce, with the company forced to cut thousands of jobs due to its main aviation unit falling on hard times amid the Covid-19 crisis.

Rolls-Royce shares rebound after Pfizer-BioNTech vaccine breakthrough

Pfizer and BioNTech have provided the first glimmer of hope that the world could have a vaccine for the coronavirus after announcing its candidate was found to be ‘more than 90% effective in preventing Covid-19’.

It is worth noting that the vaccine still has a number of hurdles that it must clear before it can be rolled out, but overall the announcement has been met warmly by scientists worldwide, with some believing life could return to normal as early as spring.

‘Today is a great day for science and humanity,’ Pfizer Chairman and CEO Dr Albert Bourla said. ‘The first set of results from our Phase 3 Covid-19 vaccine trial provides the initial evidence of our vaccine’s ability to prevent COVID-19.’

‘We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen,’ he added.

‘With today’s news, we are a significant step closer to providing people around the world with a much-needed breakthrough to help bring an end to this global health crisis.’

How to trade stocks with IG

Looking to trade Rolls-Royce and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Rolls-Royce Holdings PLC’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

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

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.