Proactive Investors - Rolls-Royce Holdings PLC (LON:RR) was the top performing stock in the FTSE 100 on Tuesday, rising 4.2% to 210.60p, with Barclays (LON:BARC) feeling recent weakness in the share price presents a buying opportunity ahead of the November Capital Markets Day (CMD).
The bank pointed out the stock has de-rated by around 10% in the past month, a function it thinks of longer cycle pressure and macro economics.
At the CMD, Barclays expects to learn the output of the strategic review, including quantifiable details around commercial optimisation costs and benefits, and the "all-important new medium-term targets".
“Profitability and pricing are likely to be an investor focus, and, in our view, key drivers of upside for 2024/25 EPS/free cash flow (FCF) consensus estimates,” the broker said.
Barclays has upgraded Rolls-Royce to 'overweight' from 'neutral' and set a 270p price target.
It also increased its 2024/25 EPS forecasts by 25%, placing estimates 25%/40% ahead of the current 2025 EPS/FCF company-compiled consensus.
It views Rolls-Royce's ability to grow its free cash flow/share as attractive for investors.