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(Sharecast News) - Citi hiked its price target on Rolls-Royce on Monday to 1,647p from 1,101p as it "materially" upgraded its long-term profit and cash flow forecasts by 30- 40% following "very strong" first-half results.
"However, recent share price appreciation leaves insufficient upside to upgrade to buy, and we maintain our neutral rating," the bank said.
Citi said the forecast changes are driven by improvements across all divisions, but most significantly in Power Systems.
"While we also increase Civil Aerospace forecasts, we believe the record H1 Defence margins are not sustainable.
"Our sensitivity analysis indicates Power Systems is now the most influential driver of value, surpassing Civil Aerospace."
At 1100 BST, the shares were up 1.5% at 1,564.60p.
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