JP Morgan has raised its price target on Rolls-Royce Holdings PLC (LSE:RR.) to 1,040p (from 900p) and retains an 'overweight' recommendation.
The American bank nudged 2026–28 EPS forecasts up by 1–2% on “improving prospects in most markets,” despite a softer US dollar weighing on conversions.
JPM highlights that Rolls’s service-led model drives “medium-term free cash flow … boosted by advance payments on long-term service agreements.”
Even after applying a conservative haircut to those receipts, he notes, Rolls still trades at a significant free-cash-flow yield discount to peers Safran and GE.
With valuations at multi-year lows and catalysts ranging from civil aerospace recovery to defence and power systems, JPM sees scope for that valuation gap to close, provided Rolls continues to execute on its order book and cash-flow targets.
The stock was down 5.2p to 882.6p.