Rolls-Royce Holdings PLC (LSE:RR.) shares have had a strong run, and a fresh nuclear-powered catalyst has just rolled in, which analysts see stretching the potential for the share price.
The company has been selected to supply the technology for the UK’s first small modular reactor (SMR), marking a significant milestone in the country’s nuclear energy strategy and opening a new chapter for the engineering giant.
Deutsche Bank’s Christophe Menard sees the government’s £2.5 billion commitment to the programme as a vote of confidence in Rolls-Royce’s tech, which draws on decades of experience powering the Royal Navy’s nuclear submarines.
The bank reckons this development alone adds around 16p to the share price, with more upside if further SMR deals materialise abroad. Markets like the Czech Republic and Sweden are already showing interest.
It’s no secret that SMRs are expected to play a growing role in the shift to cleaner energy. Smaller, quicker to build, and cheaper than traditional nuclear plants, they’re being pitched as a key part of the low-carbon mix.
In light of this, Deutsche has upped its price target for Rolls-Royce from 860p to 935p, reiterating its 'buy' rating. With the shares currently trading at 880p, that would offer room to run.
The stock, up over 50% year to date, advanced a further 1.7% on Wednesday to 894.6p.