Image source: Shutterstock

Highlights

  • Multiple analysts reaffirmed BUY ratings with target prices up to 12.28% above the current price.

  • ODDO BHF, Rothschild & Co Redburn, and ESN/CIC Market Solutions among firms issuing bullish outlooks.

  • Rolls-Royce maintains FY25 guidance with division-wide performance and continued cash flow.

Rolls-Royce Holdings Plc (LSE:RR.L) has emerged as a prominent pick among analysts, receiving multiple BUY recommendations. The bullish sentiment comes in light of the trading update for the period ending 31 March 2025.

At least four financial institutions have issued BUY-equivalent recommendations for Rolls-Royce.

ODDO BHF's analyst Yan Derocles upgraded Rolls-Royce to a BUY-equivalent (ACHAT) rating with a price target of GBp 1,000, implying a 12.28% upside from the last trading price of GBp 890.6. This is one of the most bullish calls currently in the market.

Another positive recommendation came from Rothschild & Co Redburn’s Olivier Brochet, who reiterated a BUY rating, targeting GBp 940, reflecting a 5.55% gain potential.

Meanwhile, ESN/CIC Market Solutions' analyst Herve Drouet also maintained a BUY rating, setting a target price of GBp 765, though this represents a -14.10% downside.

Positive Start to FY25

The reaffirmed BUY recommendations align with Rolls-Royce’s trading update for Q1 2025, which highlighted a positive start to the year with unchanged full-year guidance of £2.7 billion–£2.9 billion in both underlying operating profit and free cash flow.

In Civil Aerospace, large engine flying hours rose to 110% of 2019 levels, supported by a rise in aftermarket revenue and shop visit volumes. Certification of the Trent XWB-84 EP engine, which improves fuel efficiency by over 1%, and progress on “time on wing” initiatives bolster the division’s long-term service capability and profitability.

Defence continued to show demand across its portfolio, including delivery of the AE 3007N engine to Boeing for the U.S. Navy’s MQ-25 program.

In Power Systems, growth was fueled by demand from data centers and governments, with a strong order book (1.5x book-to-bill ratio). Development of its next-gen engine (due 2028) is on track, promising a 20% increase in output versus the Series 4000.

Rolls-Royce’s Small Modular Reactor (SMR) initiative also advanced, with Czech state utility ČEZ Group making a strategic investment. The firm remains the only company in Step 3 of the UK’s Generic Design Assessment, reinforcing its lead in nuclear innovation.

Outlook

Management confirmed a £1 billion share buyback is underway, with £138 million completed by March-end.