Rolls-Royce Shares Gain as Analyst Sees Upside to Mid-Term Targets

Rolls-Royce (LON: RR.) shares received another boost after Wells Fargo initiated coverage of the stock with an Overweight rating and a 1,350p price target in a note on Tuesday, arguing that the engineering group has further room to exceed its mid-term targets.

The bank highlighted strengthening demand for long-haul aircraft and rising engine flying hours, which feed directly into Rolls-Royce’s long-term service agreement cash flows.

The upbeat view adds to a series of recent bullish revisions across the City. Over recent months, brokers have steadily lifted their expectations following stronger guidance and improving operational performance.

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Data compiled by TradingView shows that 15 of 17 analysts now rate the stock a Buy, with only two assigning Hold ratings. The consensus price target stands at 1,442.5p, implying potential upside of about 27% from current levels.

Shares rose 2.3% on Tuesday, pulling higher from a recent decline.

Even so, Rolls-Royce shares have rallied significantly in recent years, driven by recovery in the widebody aviation market and continued cost discipline under CEO Tufan Erginbilgiç.

Analysts broadly expect further gains as airlines place larger orders for long-haul jets, boosting demand for Rolls-Royce’s high-margin commercial engines.

Wells Fargo said the company’s exposure to increasing widebody deliveries and the associated growth in flight hours positions it well to generate stronger and more predictable cash flows. That dynamic, the bank argued, gives Rolls-Royce a clearer runway to outperform its current targets.

Despite the recent pullback due to geopolitical factors, analysts remain bullish on Rolls-Royce shares, with a focus on potential further upgrades through 2026.