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Home / Special Reports / Rolls Royce down 15%; Now the time to buy?

This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.

12 November 2015

Rolls Royce down 15%; Now the time to buy?

**Shares down 15% after cut to 2016 outlook **

  • Downgraded its profit forecast for 2016
  • 4th profit warning in just over a year
  • Dividend at risk
  • Shares trading back around 5-year lows
  • Broker consensus target of 751p, implying 35% upside from current levels
  • Broker 12-Month Consensus: 22% Buy, 44% Hold, 33% Sell (full breakdown on request; Bloomberg)
  • CFDs tradeable with just a 5% margin

Page: 01

Technical Observations - For

  • Shares bounced off 5yr lows
  • Potentially oversold
  • No guarantee dividend will be cut
  • Gap could be refilled

Price Chart: 5-year (weekly)

Rolls-Royce Holdings PLC (-)

Technical Observations - Against

  • Strong sell-off
  • Acceleration in 6-month downtrend
  • Momentum negative, at extreme lows
  • Technicals negative after sharp reaction

Broker Price Targets; 

Most Bullish 1100p, Consensus 751p, Most Bearish 520p

Rolls-Royce manufactures aero, marine and industrial gas turbines for civil and military aircraft. The Group designs, constructs and installs power generation systems, transmission and distribution systems, and equipment for the marine propulsion, oil and gas pumping, and defense markets. (UK 100 )

 **Source: Bloomberg.com

Page: 02

Share             1wk                  1m                   3m                   1yr                   2yr                   3yr                   4yr                   5yr

Perf %             -6.0                  -11.7                -34.6                -23.6                -44.9                -23.9                -9.6                  14.2

Page: 03

This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.

Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
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