Rolls-Royce Earnings Pass ‘With Flying Colour,’ Investors Should Remain Positive

The Roll-Royce target was lifted by analysts at Jefferies on Thursday following the company's latest quarterly results, which saw it raise full-year profit guidance.

Jefferies now sees Rolls-Royce stock hitting 640p per share, with the target increased from 580p.

The firm, which maintained a Buy rating on the stock, said in a note to clients that Rolls-Royce met expectations “with flying color.”

They also noted that RR management did not rule out reaching the company's mid-term targets before 2027. Jefferies expects further improvement beyond those targets.

Meanwhile, Hargreaves Lansdown equity analyst Aarin Chiekrie said it was “yet another outstanding set of results” from Rolls-Royce, highlighting the strong operating profit and free cash flow.

“The relatively new CEO, Tufan Erginbilgic, is a no-nonsense leader. He's delivering on his promise to transform Rolls into a leaner, more focused company, and it's reaping plenty of rewards,” added Chiekrie.

Overall, the Hargreaves Lansdown analyst believes “investors should remain positive on the outlook for Rolls, but be aware that the pace of improvements is likely to slow from here,” noting that the company is now trading ahead of its long-term average on a forward price-to-earnings basis, which they believe increases the chances of ups and downs.

Rolls-Royce shares closed Thursday's session 7% higher, adding to its strong gains so far this year. The stock is up 60% in 2024.