Rolls-Royce: stock tumbles, with Oddo steering clear
(CercleFinance.com) - The company launched a 2 billion pound capital increase, at a 41.
4% discount to its current price, excluding subscription rights, and is set to issue a bond of at least 1 billion pounds, while signing a new 1 billion pound credit facility.
The analyst says that Rolls-Royce still expects flight hours of its long-haul engine fleet (EFHs) to decline by 55% in 2020, followed by a rebound to 70% of the 2019 level in 2021 and 90% in 2022.
The broker adds that the company continues to expect a positive FCF in H2 2021 and an FCF of 750 million pounds in 2022 against its estimate of 435 million pounds. It adds that it does not expect a return to 2019 international traffic volumes until 2026.
Oddo confirms its reduce rating on the share, with a target price of 200p, preferring Airbus, or even Safran and MTU amongst engine manufacturers.
The Rolls-Royce share is down over 9% at lunchtime on Friday.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
4% discount to its current price, excluding subscription rights, and is set to issue a bond of at least 1 billion pounds, while signing a new 1 billion pound credit facility.
The analyst says that Rolls-Royce still expects flight hours of its long-haul engine fleet (EFHs) to decline by 55% in 2020, followed by a rebound to 70% of the 2019 level in 2021 and 90% in 2022.
The broker adds that the company continues to expect a positive FCF in H2 2021 and an FCF of 750 million pounds in 2022 against its estimate of 435 million pounds. It adds that it does not expect a return to 2019 international traffic volumes until 2026.
Oddo confirms its reduce rating on the share, with a target price of 200p, preferring Airbus, or even Safran and MTU amongst engine manufacturers.
The Rolls-Royce share is down over 9% at lunchtime on Friday.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.