Connect with us

Hi, what are you looking for?


4 reasons the Rolls-Royce share price is rebounding


Rolls-Royce (LON: RR) share price has performed as I predicted in this report. The stock has made a steady recovery to the highest point in almost a year. It has risen by 66% from its lowest level in 2022, meaning that it has outperformed the FTSE 100 index. The shares have also done better than other FTSE industrial names like BAE Systems and Melrose Industries. Here are some reasons why the stock will recover.

Aviation industry recovery

Rolls-Royce stock price will likely continue recovering because of the expected recovery of the aviation industry. There are reasons to believe that this sector will recover in 2023. First, there are signs that inflation is easing in top aviation countries like the United States and in Europe. In the US, inflation has dropped in the past 6 straight months.

Low inflation leads to a rebound in traveling as consumer take advantage of these prices. This is notable because Rolls-Royce generates most of its revenue from the civil aviation industry. It makes money by entering long-term service contracts for engines that it sells. As such, the more airlines fly, the more money it makes. Fueling this situation is the fact that Mainland China and Hong Kong have all reopened.

Ultrafan engine hopes

Another potential catalyst for the RR stock price is the ultrafan engine, the biggest one in the industry. The company will conduct advanced testing of this engine in the first quarter. While this engine has no orders yet, it has a lot of promise. For one, it uses Sustainable Aviation Fuel (SAF), which produces less emissions than traditional fuels. Also, the engine consumes about 20% less of that fuel.

Therefore, I believe that the company will have more orders once testing is complete. Also, the company could use the engine as a prototype for building engines for narrow-body aircraft. If this happens, the company would re-enter an industry that is growing at a faster pace than wide-body aircraft.

Rolls-Royce new CEO

Further, the Rolls-Royce stock price will likely continue rising because of the new CEO. Tufan Erginbilgic has a long track record of cutting costs and streamlining businesses at BP. Therefore, I believe that he will work to boost the company’s efficiency.

Rolls-Royce is already a more efficient company than it was before the pandemic. Warren East, his predecessor, slashed headcount by 9,000, sold ITP Aero, and reduced debt by over 2 billion pounds. Therefore, he could accelerate the transformation.

Technicals are bullish

Rolls-Royce share price
Rolls-Royce share price chart

The other reason to buy Rolls-Royce shares is that technicals are supportive. They are about to form a golden cross, where the 200-day and 50-day moving averages crossover. Also, they formed an inverted head and shoulders pattern and moved above the 50% Fibonacci Retracement level. This means that the stock has the momentum to keep rising to about 150p.

The post 4 reasons the Rolls-Royce share price is rebounding appeared first on Invezz.

You May Also Like


Inflation appears to be on the decline. The Personal Consumption Expenditures Price Index (PCEPI), which is the Federal Reserve’s preferred measure of inflation, grew...


Artificial Intelligence has been the buzz word in financial markets ever since Microsoft announced its multibillion-dollar investment in ChatGPT (read more). According to Futurum...


“I will make no apologies that we are investing to make America strong. Investing in American innovation, in industries that will define the future,...


Mimiq, Inc is announcing today the launch of their new product, Mimiq Track, at CES as part of their latest product line to operate...

Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2023