(News Bulletin 247) – Oddo BHF raises its opinion on Rolls-Royce from ‘underperforming’ to ‘neutral’ with a price target raised from 90 to 160 pence, highlighting ‘the new trajectory of FCF linked to the faster improvement of the British engine manufacturer’s long-haul offer.
The design office, however, still expressed ‘some doubts about the extent of the change that the new management is ready to implement as well as the dependence of the main division on a single program (Trent XWB)’.
Based on its new price target, the share would be traded on a 2024 PE of 18.2 times and an adjusted FCF yield of 8.2%, i.e. a justified discount in its view of respectively 13% and 85% compared to than the Safran/MTU average.
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