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(Sharecast News) - Analysts at Berenberg raised their price target for RollsRoyce from 1,270p to 1,430p on Friday and upgraded the stock from 'hold' to 'buy', citing the firm's bestinclass engine fleet and defensive qualities.
Berenberg noted that RollsRoyce had the youngest large engine fleet among European peers on a thrustadjusted basis and had delivered the strongest growth in flying hours so far this year. Thrustadjusted large commercial engine flying hours were up 5% yeartodate, compared with a 2% increase at Safran and a 1% decline at MTU.
The German bank noted that engines under ten years old account for 51% of RollsRoyce's fleet, versus 43% at Safran and 35% at MTU, giving an average thrustadjusted age of 12 years and an attractive platform as widebody production ramps up. It added that widebody capacity has proved more resilient than narrowbody in the face of higher jet fuel prices, favouring RollsRoyce given its 93% exposure to the widebody segment.
Berenberg also noted that Rolls-Royce's defence and power systems divisions together were expected to contribute about 43% of 2026 underlying earnings, providing diversification into structurally growing endmarkets.
Looking ahead, Berenberg now forecasts 6% engineflyinghour growth in 2026 and lifted its 2026 underlying EBIT margin assumptions for Rolls-Royce's civil aerospace and power systems iunits by 50 and 60 basis points, driving 2% and 3% upgrades to EBIT and free cash flow estimates, respectively.
Reporting by Iain Gilbert at Sharecast.com
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