Biggest entry in 2023: Rolls-Royce engaged in free fall? Why Berenberg recommends selling now!

Investment bank Berenberg has raised its sell rating on Rolls-Royce due to concerns about the performance of the XWB-97 engine in the hot and sandy environment of the Middle East. The concern stems from comments made by Emirates President Tim Clark during the Dubai Air Show in November. Berenberg analyst Philip Buller warned that the problems could affect the margins of companies in the engine business in the medium term. Despite the impressive performance of the new CEO of Rolls-Royce, Tufan Erginbilgic, Berenberg pointed out that the implementation of his plans is still in the early stages and the aviation sector has high risks. Shares of Rolls-Royce have more than tripled in the last year as demand for its engines increased following the Covid-19 pandemic. Berenberg is one of only two banks to issue a sell recommendation on Rolls-Royce, with a price target of 240 dinars, the lowest of all companies surveyed.