Rolls-Royce: Jefferies boosts TP
(CercleFinance.com) - Jefferies maintains its buy rating on Rolls-Royce shares, raising its target price for them from 170p to 210p.
The analyst says that the stock is now his top pick in the sector, especially as Rolls-Royce shares have recently lost ground, despite a positive trading update.
Jefferies believes that the group has medium-term free cash flow potential of over £2bn: it also expects EBIT to improve by £0.9bn by 2026.
Jefferies adds that 2026 FCF could be strengthened if the group's strategic review delivers sufficient cost savings in civil to achieve margins of 13%-16% over the medium term (compared to Jefferies' forecast of 12.6% for 2026).
All said, the broker raises its expectations for 2023, targeting a 15% increase in FCF and a 4% increase in annual EPS.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The analyst says that the stock is now his top pick in the sector, especially as Rolls-Royce shares have recently lost ground, despite a positive trading update.
Jefferies believes that the group has medium-term free cash flow potential of over £2bn: it also expects EBIT to improve by £0.9bn by 2026.
Jefferies adds that 2026 FCF could be strengthened if the group's strategic review delivers sufficient cost savings in civil to achieve margins of 13%-16% over the medium term (compared to Jefferies' forecast of 12.6% for 2026).
All said, the broker raises its expectations for 2023, targeting a 15% increase in FCF and a 4% increase in annual EPS.
Copyright (c) 2023 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.