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Citi hikes Rolls-Royce price target
(Sharecast News) - Citi hiked its price target on Rolls-Royce on Friday to 1,101p from 641p, citing three main factors. The bank said it has increased its 2025 profit forecast by 23% and 2029 by 28%. Citi's free cash flow forecasts have also increased, by 13% this year rising to 20% in 2029.
Citi also pointed to an increased mid-term (2030-34) implicit profit growth assumption from 4% to 8%, broadly in line with expected fleet growth.
Finally, it noted around 40p of value for SMR.
"Rolls-Royce may look expensive on profit multiples, but it is in line on cash metrics, which we believe more important," Citi said.
"We forecast 12.3% profit compound annual growth rate over 2025 to 2030 and cash conversion peaking at 120% before trending down to 114%, which we use for our valuation."
Citi maintained its 'neutral' rating on Rolls-Royce.
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