On Friday, Citi maintained a Buy rating on Rolls-Royce Holdings Plc (LON:RR:LN) (OTC: RYCEY) and increased its stock price target from GBP4.31 to GBP5.55. The adjustment reflects a positive outlook on the stock, with the firm citing several factors that could contribute to further growth.
The analyst from Citi highlighted that despite recent gains in Rolls-Royce (OTC:RYCEY) shares, there is still potential for upside. The optimism is partly due to the accelerating wide-body aircraft cycle, with limited delivery slots available for the A350 before 2030 and for the A330 before 2028. This industry dynamic is expected to benefit Rolls-Royce, which is a major supplier of aircraft engines.
In addition to the favorable market conditions for wide-body aircraft, the analyst anticipates that the positive sentiment surrounding Rolls-Royce will continue to contribute to the company's rerating. One key factor that could enhance investor confidence is the potential reinstatement of the dividend, which the analyst suggests could be announced as early as the first-half results or at the full-year results.
Rolls-Royce's performance and future prospects seem promising according to Citi's analysis. The stock price target increase to GBP5.55 signals the firm's belief in the continued growth potential of the company's stock.
The aerospace and defense industry, where Rolls-Royce operates, is closely watched by investors for signs of growth and stability. The company's progress in securing its position in the market for wide-body aircraft engines and the potential return of dividend payments are key elements that could influence its stock performance in the near future.
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