In key news on UK stocks, FTSE 100-listed Rolls Royce Holdings PLC (GB:RR) maintained its guidance for the full year 2024 after witnessing a promising start to the year. The company released its trading update for the first four months of 2024, highlighting its operating profits and cash growth amid supply chain hurdles. The market reacted positively to the update, with shares up by 3.4% as of writing.
In 2023, Rolls-Royce shares soared by an impressive 193%, securing the top spot on the FTSE 100 index. The stock has started 2024 on a similar trajectory, with a year-to-date gain of nearly 50%.
Rolls-Royce specializes in designing engines and power systems for the aerospace and defence industries globally.
More from Rolls-Royce’s Trading Update
As per the update, Rolls Royce experienced a strong recovery in its Civil Aerospace operations, driven by the ongoing resurgence of international travel in Asia and the expansion of the company’s aircraft fleet.
As a result, its long-term service agreements for large engines’ flying hours (EFH) rebounded to 2019 levels during the first four months of 2024. For the full year, the company anticipates its EFH to range between 100% and 110% of 2019 levels.
Speaking of its Defence segment, the operations are well supported by numerous contract wins.
Additionally, Rolls Royce remains on schedule to achieve an annualised sustainable benefit of approximately £200 million by the end of 2025 from specific organizational changes initiated in October 2023.
The company will announce its first-half results for 2024 on August 1.
Is Rolls-Royce a Good Stock to Buy?
Following the update, analyst Victor Allard from Goldman Sachs confirmed a Buy rating on Rolls Royce stock, projecting an upside of 17.5%. Allard remains optimistic about the stock, citing the company’s positive trajectory highlighted in the favourable trading update.
Similarly, Ross Law from Morgan Stanley reiterated a Buy rating on RR stock with a forecast of 17% upside potential.
According to TipRanks, RR stock has received a Strong Buy rating based on Buy recommendations from all nine analysts covering the stock. The Rolls-Royce share price forecast is 516.62p, which is 16% higher than the current trading level.
