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Rolls-Royce shares: Is this year’s recovery set to be turbocharged?

The Rolls-Royce share price has been back in the spotlight following its Q1 results. The iconic aerospace brand has seen shares fall 4.46% in the last six months, but are there reasons to be optimistic this summer?

  • Rolls-Royce shares fell from 116.75p to 111.30p in the last six months
  • £1.3bn+ annual cost savings targeted by end of 2022
  • Rolls-Royce group hoping to be cash flow positive by H2 2021
  • Ready to trade the Rolls-Royce share price? Open an account today

Are Rolls-Royce shares stalling as the aviation industry holds its breath?

The Rolls-Royce share price is up 9.69% in the last month, but remains 4.90% down over the last six months. Such was the steep recovery of Rolls-Royce shares between October and December 2020, it saw the price soar from lows of 38.98p to 134.90p.

However, since the turn of the New Year, Rolls-Royce shares have been rather more subdued. It gave away some of those H2 2020 gains by falling to 91.70p at the end of January 2021.

Since then, the price has been trading within a tight range between 100p and 110p. This is largely due to the uncertainty that remains within the aviation industry, as the travel sector awaits the green light to reopen borders fully. Sales of new aircraft engines have also stalled as airlines seek to optimise their fleets.

Will major DHL engine deal help lift Rolls-Royce expectations?

In the midst of market uncertainty, the renowned aerospace brand announced its Trent 700 deal with DHL, which seeks to utilise Rolls-Royce’s TotalCare service, for work on the logistic company’s Airbus A330 aircraft. The deal has been made as part of the company’s overhaul efforts to future-proof itself, after an ‘unprecedented’ year – with the purpose of the deal being to potentially cut costs for both companies, as well as improve upon their environmental impact.

Rolls-Royce launches the biggest aviation engine testing facility in the world

The Covid-19 pandemic has seen Rolls-Royce pare its engine production, resulting in thousands of job cuts. However, the company is looking to safeguard its world-leading engine production heritage with the unveiling of a new £90m aircraft engine testing facility in Derby.

The FTSE 100-listed group believes the new facility will promote sustainable aviation for decades to come, helping the firm to evaluate the performance of its long-haul passenger aircraft engines. The project, nicknamed ‘Testbed 80’, will help Rolls-Royce to compete with General Electric and Pratt & Whitney at the forefront of the aero-engine manufacturing space.

In the Defence industry, Rolls-Royce is also awaiting the outcome of its tender for the new B-52 engine programme with the US Department of Defence. Meanwhile, the UK government has ring-fenced £2bn of funding for Rolls-Royce’s involvement in a new Future Combat Air System.

Go long or short with the Rolls-Royce share price today

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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. See full non-independent research disclaimer and quarterly summary.

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