Berenberg raises target price on Rolls-Royce.

Source: Sharecast

Berenberg said Rolls‑Royce was again the strongest performer in July, recording 5.7% programme‑weighted, thrust‑adjusted EFH growth year‑on‑year - ahead of Safran at 3.5% and MTU at 1.6%. Year‑to‑date, Rolls‑Royce has delivered 5% adjusted EFH growth, compared with 2.4% at Safran and a 0.4% decline at MTU.

Sequential growth also remained robust, with Rolls‑Royce posting a 9% month‑on‑month increase in July, driven by the Trent XWB and Trent 700 programmes. Berenberg also highlighted that the company's large‑engine fleet remained the youngest among European peers, with an adjusted average age of 11.9 years, supported by a high share of engines under ten years old. That profile, it added, underpins a durable medium‑term growth outlook.

The German bank noted that elevated jet‑fuel prices - still 55% to 65% above pre‑conflict levels across major hubs - continued to shape flying‑hour trends, but said Rolls‑Royce's exposure to newer, more efficient widebody engines provided resilience.

Berenberg reiterated Rolls‑Royce as its 'top pick', arguing the group was benefiting from powerful end‑market growth and self‑help measures across all divisions. It added that the shares remained attractively valued, trading on a 4.4% free‑cash‑flow yield in 2028 - around 80 basis points cheaper than peers.

Reporting by Iain Gilbert at Sharecast.com