Edison launches full coverage of Rolls-Royce
Edison has recently published a comprehensive report examining the investment merits of Rolls-Royce, focusing on the group's potential to benefit from delivery of its £60bn order book, more than doubling revenues over the next decade.
In his report - 'On the shoulders of giants' - Edison's head of Industrials, Roger Johnston, argues that the group is building on its consistent strategy and benefiting from the significant investment in R&D and manufacturing facilities over the past decade to deliver increasing numbers of high-value Trent engines. As a result, Rolls-Royce has the opportunity to deliver significant operational gearing and bottom-line growth. In addition, management focused on ensuring a culture of delivery and on customers (delivering on promises), concentration (where to invest) and cash/cost (improving financial performance) is designed to drive operational margins and cash flow toward best in class across the group over the next decade. Modelling several scenarios by which this strategy could be achieved, Edison values Rolls-Royce between 1,419p/share, a 17% premium to the current share price, and 1,714p/share, a 41% premium to the current share price.
In the above video, Simon Goodson of Rolls-Royce Holdings - which provides integrated power solutions for customers in civil aerospace, defence, marine and energy markets - discusses Rolls-Royce’s competitive edge and its opportunities for growth.
Rolls-Royce supports its customers through a worldwide network of offices, manufacturing and service facilities. In the past decade, Rolls-Royce has transformed its business. Today, it is truly global, with over half the order book from the Middle East and Asia. Its portfolio has become more diversified through organic growth and acquisition and the company has significantly increased the revenues generated from servicing the power systems it produces.
The launch of coverage on Rolls-Royce is part of a programme of research initiations on industrials companies exposed to global market opportunities.
Find the full report here
