- Rolls-Royce target price raised
- Whitbread maintains ‘Buy’ rating
- Morgan Sindall target price raised
Rolls-Royce target price raised
JPMorgan Cazenove has raised its target price for Rolls-Royce from 900p to 1,040p, maintaining its ‘overweight’ rating on the shares.
The bank increased its 2026-2028 earnings per share estimates by 1-2%, noting improving prospects in multiple end markets, whilst also offset by the weaker US dollar FX rate.
“We think this is a good outcome given that we recently had to lower our estimates for some other European Civil Aerospace companies due to the weaker US dollar,” it said.
JPM is applying higher target multiples to its free cash flow (FCF) estimates suggesting, “In recent years we have grappled with how to value Rolls-Royce, given that its medium-term FCF is boosted by its business model. ” it said. “However, even if we apply a haircut to our FCF estimates for these advance payments, Rolls-Royce is still trading at a very large discount to Safran and GE on FCF yield.”
According to Stockopedia, there are 16 brokers covering Rolls-Royce with a consensus rating of ‘Buy’.
Rolls-Royce shares were trading at 917p at the time of writing, up 55% this year and up 97% over the last 12 months.
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Whitbread maintains ‘Buy’ rating
Shore Capital has maintained a ‘buy’ rating for Whitbread despite the challenges faced by the hotel and hospitality business in the UK.
Whitbread shares were sent lower last week after the company reported challenging conditions in the UK in its first quarter results noting that whilst the group continued to outperform in the mid-scale hotel sector, for the UK both accommodation sales and RevPAR fell by 2%. There was better news with progress in the German market where the company continues to expand was rather more impressive with like for like sales 13% ahead, reflecting the maturing brand.
Shore Capital analyst Greg Johnson noted “Q1 trends are tracking modestly behind this in the UK, we are minded [to maintain] our full year estimates, especially noting the positive momentum in Germany.” “Management have set out a roadmap to add over £300m to the bottom line and return of £1bn of cash in the medium term, which on our estimates could increase EPS to comfortably above 300p. This opportunity is yet to reflected in the share price, although a return to UK RevPAR growth is the likely key catalyst to a rerating.”
Tony Cross noted in his update last week that the five year plan remains on track and management also note that forward bookings in the UK remain ahead of the comparative.
Whitbread is currently covered by 18 brokers, with the consensus rating the stock as a ‘Buy’ according to Stockopedia.
Shares in Whitbread were trading at 2753p at the time of writing, down 8% this year, and down 7.5% over the last 12 months.
Morgan Sindall target price raised
Berenberg has raised its price target for Morgan Sindall LON:MGNS from 4,500p to 5,000p following the construction firm’s trading update last week, noting that “strong trading conditions” had continued.
The trading update advised the market that it now expected full year results to be significantly ahead of previous expectations. Morgan Sindall saw strong trading activity at the start of the year for its Fit Out division and this has been sustained, whilst the construction side of the business has also fared well.
Berenberg commented “This helped lift the shares to new record highs, although we continue to believe there is more growth to follow in time, given the various options the portfolio structure provides…We increase our EPS by 11% in FY 2025 and 6% in FY 2026,”
Morgan Sindall is followed by six brokers with a consensus rating of ‘Buy’ according to Stockopedia.
Shares in Morgan Sindall were trading at 4365p at the time of writing, up 12.8% this year and up 67% over the last 12 months.,
