Analyst Ross Law of Morgan Stanley maintained a Buy rating on Rolls-Royce Holdings, retaining the price target of p1,275.00.
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Ross Law has given his Buy rating due to a combination of factors that highlight the positive trajectory of Rolls-Royce Holdings. The company continues to execute its transformation strategy effectively, aligning with expectations and reinforcing confidence in its fiscal year 2025 outlook. Despite a slight underperformance in engine flying hours, which are tracking just below the guidance range, the overall demand in the civil aerospace sector remains robust. This is complemented by the successful progression of time on wing initiatives.
Additionally, Rolls-Royce’s Power Systems segment is experiencing sustained demand and growth, particularly driven by sectors such as data centers and governmental projects. The introduction of new products, like the fast-start gas generator, and strategic movements in the small modular reactor space, including anticipated contracts and regulatory advancements, further bolster the company’s growth prospects. Although there are no significant surprises in the recent update, the completion of a substantial buyback aligns with the company’s targets, supporting the Buy rating despite potential short-term share performance fluctuations.
In another report released today, Jefferies also maintained a Buy rating on the stock with a p1,290.00 price target.