This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Shares remain above key 1000p level and pivotal 50-day moving average. Higher US defense spend means a potentially bigger client. Pullback after positive reception to H1 results which beat expectations, saw guidance increased and suggested Trent engine fix costs under control.
Risks to Rolls Royce shares include a worsening of current engine issues, a significant drop in defense spending, a stronger GBP depressing the value of USD generated revenues and profits, a downturn in global growth sentiment, and negative broker comments/downgrades.
Brokers/analysts are bullish on the shares with 77% suggesting investors should Buy or Hold. While the consensus target of 1010p suggests the shares are fairly valued, 45% of brokers see upside from current levels which offers potential for others to follow with upgrades that may help the shares towards our objective of Aug highs.
Next Event: FY results, 28 Feb 2019
Latest Broker 12-Month Consensus: 47% Buy, 50% Hold, 23% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | -0.9 | 2.0 | 20.2 | 20.8 | 11.9 | 29.3 | 36.4 | -0.6 | -7.1 |
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