Rolls-Royce: stock crashes - Oddo says steer clear

(CercleFinance.com) - The Rolls-Royce share is down sharply in London on Thursday, falling almost 8% an hour into trading, after the UK engine manufacturer pulished an underlying pre-tax loss of 3.
2 billion pounds for the first six months of 2020 and an underlying operating loss of 1.7 billion pouns.

Alongside this bad news, an Oddo BHF analyst this morning confirmed a "Reduce" rating on the share, along with a target price of 230 pence.
While the broker's target price is similar to the share's current price, Oddo BHF regrets that, while H1 results are broadly in line with the announcements made at the start of July, they are worse than expected at the EBIT level.

The broker therefore says that it is maintaining a Reduce rating on the share because it expects attrition of the installed base due to a slow return of international traffic (a forecast return to 2019 levels not until 2025) and an acceleration of aircraft retirements, but also to a decline in long-haul deliveries until 2025-2026.



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