Core Viewpoint - Rolls-Royce has transformed from a pandemic laggard to a top performer in the FTSE 100 Index, with significant stock price appreciation and strong demand across its business segments [2][3]. Group 1: Stock Performance - Rolls-Royce share price has increased from a low of 1,020p on November 24 to 1,110p, marking a rise of over 100% from its lowest level in January [1] - The stock has surged from 62.15p in 2022 to 1,112p, representing a 1,527% increase, elevating its market capitalization to over $126 billion [2] - The stock price has shown positive technical indicators, remaining above the 50-day and 100-day Exponential Moving Averages, suggesting bullish control [9] Group 2: Financial Outlook - The company expects full-year operating profit to be between £3.1 billion and £3.2 billion, with free cash flow projected between £3.0 billion and £3.1 billion [3] - Despite strong stock performance, Rolls-Royce maintains a trailing P/E ratio of 16.9, which is lower than the S&P 500 Index average of 22, indicating it is not overly expensive [6] Group 3: Business Growth Drivers - Rolls-Royce has received significant orders from airlines such as IndiGo and Malaysia Airlines, contributing to its recovery as active flying hours surpass pre-pandemic levels [4] - The company is benefiting from a boom in the defense industry, with potential large contracts, including a €50 billion spending package in Germany [4] - The Small Modular Reactors (SMR) business has gained traction, with orders from the UK government and expansion plans into the US market, supported by a recent $800 million investment announcement [5][6]
Rolls-Royce share price eyes a rebound as a bullish pattern forms