Rolls-Royce Holdings PLC (LSE:RR.) shares soared on the news Barclays analysts had upgraded their view of the manufacturer’s stock, but with the announcement came into view the firm’s upcoming capital markets day.
Due to be held on November 28, the investor meeting will provide chief executive Tufan Erginbilgiç with the opportunity to update on the company’s progress after almost a year in charge.
According to Barclays, this itself holds the prospect of a big update on a strategic review within the company and offers a potential catalyst for its shares.
Rolls-Royce's capital markets day will likely include “quantifiable details around commercial optimisation costs and benefits”, Barclays said on Tuesday.
Information on Rolls-Royce’s “all-important new medium-term targets” could also be provided, the bank added.
Rolls-Royce has indeed come a long way since Erginbilgiç’s appointment in January, with a return to profit at the half-year stage a key moment in his bid to turn the company around.
On the positive result, Rolls-Royce also laid out higher full-year guidance of around £1.4bn and £1.0bn respectively for profit and cash flow.
Given the ongoing plan, which aims to reinvigorate Rolls-Royce after several pandemic-hit years, Barclays is not the only bank to have its eyes firmly fixed on the upcoming capital markets day.
UBS noted back in August that the event remained key for analysts to further scrutinise Erginbilgiç’s efforts so far.
Analysts from the bank had also acknowledged at the time that sentiment around Rolls-Royce would likely improve as the key date neared, as seen through Barclay’s move to re-rate the FTSE 100 firm to ‘overweight’ from ‘equal weight'.
Improvement across the global aviation sector, better contract terms for Rolls-Royce itself and belief that risks were already priced into its stock seem to have left analysts optimistic.
This idea that Rolls-Royce has little in the way of bad news left to publicise was echoed by Barclays on Tuesday, which pointed to continued margin growth in its civil aviation wing and a growing number of servicing agreements for airline engines as key drivers moving forward.