MTU Rolls-Royce competitor at 5 years old – more likely?

MTU Rolls-Royce competitor at 5 years old – more likely?

British engine manufacturer Rolls-Royce will present new business figures next Thursday. Strong expectations ensure continued early buying and pushed Rolls-Royce shares to their highest since March 2019 on Tuesday. Meanwhile, there is good news too from an important partner in India.

Rolls-Royce, listed in the FTSE 100, will present its annual figures for 2023 on Thursday. Market participants expect a record result of 1.4 billion pounds.

This means that CEO Tufan Erginbilgiç’s turnaround plan is likely to continue. The former BP manager took over the company in January 2023 and shortly afterwards presented a strategy that would quadruple profits within five years. Based on profits of £652 million in 2022, profits are expected to increase to £2.8 billion by 2027.

The CEO also plans to increase margins in its main commercial aerospace business to 17 percent from 2.5 percent in 2022. Last year, the company unveiled plans to cut 2,500 jobs, representing up to six percent of its workforce.

Citi analysts predict that the British aircraft engine manufacturer’s profit in 2023 could more than double compared to last year. Some market participants speculate that Rolls-Royce may issue a dividend.

In 2023, Rolls-Royce shares were the most advanced in the FTSE 100. At 335.40 British cents, Rolls-Royce shares on the London Stock Exchange marked the highest price level since March 2019. The highest level of 444 GBp is derived from that. in 2013. In the German Xetra trade today, the RR share temporarily rose to 3.93 euros (see chart).

Rolls-Royce-Chart (in Euro, Xetra)

The report from India also fits the current favorable situation at Rolls-Royce. Global supply chain solutions provider TVS Supply Solutions has extended its contract with Rolls-Royce for a further five years until 2029. The extension is related to a Parts Distribution Center (PDC) in Singapore, which serves key Asia-Pacific markets for Rolls-Royce’s Power Systems division.

SHAREHOLDER proposed to buy Rolls-Royce at the beginning of August 2023. The share was quoted at 2.13 euros at that time. Even after almost-doubling, there is more potential for upside. The initial price target of 4.00 euros has now been increased to 5.00 euros.

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