Among the famous UK stocks, FTSE 100-listed Rolls-Royce Holdings PLC (GB:RR) has earned a bullish outlook from analysts despite recent turbulence in the share price. In the last two weeks, the stock has received Buy ratings from four analysts, predicting further upside potential. Overall, analysts favor the stock mainly due to its robust financial performance, ongoing successful transformation program, and favorable outlook.
Rolls-Royce is a British company that designs engines and power systems for the aerospace and defence industries.
RR Stock Hit by Industry Headwinds
RR stock has dropped from its one-month peak of 485.5p to the current trading price (as of July 12) of 449p. This was mainly triggered after European aircraft manufacturer Airbus SE (EADSY) (FR:AIR) revised its FY24 delivery targets to 770 aircraft, down from the previous guidance of 800 deliveries.
Airbus’ reduced target reflected the prevalent supply chain issues across the industry as a whole.
In its first update of 2024, released in May, Rolls-Royce also highlighted supply challenges. However, the company reaffirmed its full-year guidance for 2024, citing strong operating profits and cash growth. In 2024, the company’s underlying operating profit is expected to range between £1.7 billion and £2.0 billion, up from the £1.59 billion reported in 2023. Moreover, the free cash flow is projected to reach between £1.7 billion and £1.9 billion, as compared to £1.3 billion last year.
The company will publish its first-half results for 2024 on August 1.
Analysts Stay Bullish
Earlier in July, analyst Ian Douglas raised his price target on Rolls-Royce’s stock from 400p to 550p, now predicting a growth rate of 22.03%. Douglas is a five-star-rated analyst as per the TipRanks Star Ranking tool. With this tool, TipRanks tracks the performance of various financial experts, evaluating them based on their success rate, average returns, and statistical significance.
Over the last year, Douglas has achieved a 94% success rate, ranking him among the most accurate analysts for RR stock.
Meanwhile, analysts from Goldman Sachs, Barclays, and CFRA also reiterated their Buy ratings on RR stock recently.
What Is the Share Price Prediction for Rolls-Royce?
According to TipRanks, RR stock has received a Strong Buy rating based on unanimous Buy recommendations from nine analysts. The Rolls-Royce share price forecast is 549.92p, which is 22% higher than the current trading level.
Year-to-date, RR stock has gained 51%.
