Rolls-Royce has seen its market capitalisation surge past £50bn once again, following a rally in its shares. The Derby-based FTSE 100 giant first crossed this milestone at the beginning of December 2024 before experiencing a dip in its share price.
However, recent days have seen a significant jump in its share price, pushing the company's value over the £50bn mark again, as reported by .
This increase aligns with news from last week that the FTSE 100 had reached a new record high as investors anticipate a potential interest rate cut by the Bank of England next month.
On 17 January, City AM reported a 3.2% growth in the value of London’s 100 largest listed companies over the past week.
This growth comes amidst a wave of disappointing economic data, increasing the likelihood of a more aggressive interest rate cut by the Bank of England.
The previous all-time high for the FTSE 100 was achieved earlier this year on 15 May, hitting an intra-day high of 8,474.71. However, on Friday it reached a new intra-day high of 8,514.79, growing 1.4% throughout the morning.
This news follows better-than-expected inflation data on Tuesday and further signs of stagnation in the º£½ÇÊÓƵ economy.
Earlier this month, reports also suggested that a City broker expects Rolls-Royce to continue leading the FTSE 100 in terms of share price growth.
Panmure Liberum analyst Nick Cunningham has suggested that Rolls-Royce's shares could potentially rise by over 40 per cent in the next three years.
The company's share price has seen a six-fold increase in the past two years and was the top performer in the FTSE 100 in 2024, due to a significant improvement in the firm's financial performance.
Panmure Liberum predicts a slight drop in the company's share price from 567p to 550p over the coming year, but anticipates a swift rise to 820p within the next three years, up from previous figures of 400p and 665p respectively.
These forecasts are partly attributed to the ongoing growth in civil aviation, which has enabled Rolls-Royce's cash flow to continue its upward trajectory.
However, Rolls-Royce's shares experienced a dip at the beginning of January following a downgrade by analysts at investment bank Citi. The FTSE 100 giant was downgraded from a 'buy' to a 'neutral' rating, while the price target was raised from 555p to 641p.
In November 2024, Rolls-Royce maintained its full-year guidance as the engineering behemoth continued to reap the benefits of surging demand for its aircraft engines and increased defence spending.
In a trading update, the FTSE 100 company stated it anticipated an underlying operating profit of between £2.1bn to £2.3bn for the current year and free cash flow of £2.1bn to £2.2bn, unchanged from a previous forecast made in August.
The company highlighted the ongoing robust demand in Civil Aerospace, where large engine flying hours increased by 18 per cent year-on-year to 102 per cent, exceeding the levels observed before the pandemic decimated passenger numbers.
