MARKET REPORT: Turbo Tufan starts Rolls-Royce as British engineering giant’s value passes £40 billion for the first time

Rolls-Royce shares hit a record high, pushing its value above £40 billion for the first time.

In another bullish session for the tech giant, Goldman Sachs analysts raised their price target for the share from 524p to 545p.

The upgrade saw Rolls-Royce shares rise 2.8 percent (or 13 cents) to 485.5 cents, valuing its value at £40.7 billion.

Since ‘Turbo’ Tufan Erginbilgic took over as CEO in January 2023 – when the company was valued at less than £8 billion – profits have soared to almost 420 percent.

An investor who bought £1,000 worth of shares when he took over would now have an asset worth almost £5,200.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Rolls-Royce has made huge progress over the past 18 months.

‘A restructuring program has led to improvements in productivity, while divestments have eased the burden of recent financial scars and reduced debt levels.

‘Pent-up demand for travel, which has translated into strong airline bookings, has benefited Rolls-Royce as a large part of its revenue comes from servicing engines for larger long-haul aircraft.

‘The company’s position in the aerospace and defense industry is enviable, especially given the high barriers to entry, meaning there are very few smaller competitors entering the market.

“Now that the defense budget is going to increase, the company may find itself in an even better position.”

With all eyes on the Bank of England, the FTSE 100 rose 0.8 percent, or 67.35 points, to 8,272.46, while the FTSE 250 rose 0.6 percent, or 117.67 points, to 20,498.72 .

The Bank again kept interest rates at 5.25 percent, but with inflation back at the 2 percent target, it indicated that a cut is likely this summer.

Stock Watch – Timeout

Shares of Time Out rose after it said it is on track to beat earnings estimates.

The company touted strong results from both its media and market activities last quarter.

The company told shareholders it expects earnings to be “ahead of current market expectations” as a result.

Time Out Group boss Chris Ohlund said the company will “look to the future with confidence” after stronger recent sales.

Shares rose 1.9 percent, or 1p, to 53p.

Precious metals were on the rise as gold prices rose, with Fresnillo up 4.4 percent, or 24p, to 565p and Hochschild up 4.1 percent, or 7.2p, to 184.8p.

CMC Markets rose 12.8 per cent, or 36p, to 317p after reporting a 21 per cent rise in full-year profits to £63.3m, thanks to strong retail and institutional trading and strict cost control measures.

Trading platforms such as CMC enjoyed an increase in sales during the pandemic and in 2022 due to increased market volatility due to events such as the Russian invasion of Ukraine.

Despite a quieter 2023, they also saw a sales spike at the end of the year due to increased volatility due to the conflict in the Middle East.

Shares in Upper Crust owner SSP fell 6.1 per cent, or 9.7p, to 150.3p after analysts at Berenberg cut their price target on the stock from 280p to 180p.

Oil and gas producer Energean rose 4 percent, or 41p, to 1073p after it agreed to sell its assets in Egypt, Italy and Croatia to private equity fund Carlyle for up to £745 million.

NCC Group said profits for the year to the end of May were higher than expected due to demand for cyber security.

Although annual turnover appears to have fallen by 1 per cent to £324m, operating profit was above City’s expectations of less than £30m at around £31m. Shares rose 8.5 percent, or 12.2p, to 156p.