Core Viewpoint - Rolls-Royce's share price has significantly declined, making it one of the worst performers in the FTSE 100 index, dropping from a high of 488p to 456p [1] Group 1: Stock Performance - Rolls-Royce's stock has experienced a pullback after Airbus provided a mixed financial estimate, indicating it will deliver about 770 new aircraft this year, which is lower than previous guidance [4] - The stock price has fallen by more than 25% from its highest point this year, reaching 133 euros, the lowest level since December last year [4] - Despite the recent decline, Rolls-Royce's stock has surged by over 1,300% from its lowest point in 2020 and has increased by more than 50% this year, outperforming most industrial companies [4] Group 2: Operational Challenges - Rolls-Royce is facing operational challenges, particularly with its engines for the A320neo planes being behind schedule, which could impact deliveries and financial performance [4] - The company has been affected by major supply chain issues post-Covid-19 pandemic, but it is making strong progress in improving onerous contracts [4] Group 3: Financial Outlook - Under the leadership of Tufan Erginbilgiç, Rolls-Royce aims to grow its operating profit from £1.6 billion last year to between £2.5 billion and £2.8 billion, with an expected operating margin of 13% to 15% in the mid-term [4] - Rolls-Royce primarily generates revenue from long-term contracts with airlines such as Etihad, Lufthansa, and Emirates, which may mitigate the impact of current challenges [4]
Rolls-Royce share price suffers a harsh reversal: here's why