In research published on Thursday, Bank of America analysts noted that Rolls-Royce Holdings PLC (LSE:RR.) has managed to recover 88% of its pre-Covid engine flying hours (EFH), with China’s reopening likely to support a move above 90% in the fourth quarter.
Analysts may even revise Rolls-Royce’s EFH projections higher in the run-up to the FTSE 100 constituent’s capital markets day on November 28.
BofA noted that Rolls’ EFH “significantly accelerated” through the third quarter following a weak second quarter and strong first quarter.
This has also supported higher free cash flow estimates from analysts.
In terms of run rate, BofA anticipates a 92% recovery to pre-covid levels for the full year.
BofA maintains a buy rating on Rolls-Royce shares with a price target of 254p against a publication price of 225p.