Rolls-Royce Holdings PLC (LSE:RR.) has been on a steady glide path since its big turnaround plan, and UBS thinks the next trading update will be more of the same.
The aerospace group reports in November, and the broker does not expect any surprises, just a reiteration of 2025 guidance and some upbeat commentary.
In civil aerospace, the key measure of flying activity, engine flying hours, is growing but only towards the lower end of the company’s target range.
UBS tracks a 6% rise so far this year, or 106% of 2019 levels, against guidance of 110–115%.
Even so, investors have shifted focus from flying hours to the more lucrative aftermarket work of servicing and parts, where margins are running strongly.
Elsewhere, demand remains firm in defence, while power systems are benefiting from data centre growth. Rolls is also expected to talk up its small modular reactor programme, pitched as a longer-term growth driver.
UBS has nudged its price target up from £13.10 to £13.50 after updating its valuation model. With the shares at £11.64, that implies about 16% upside.
The Swiss bank expects no drama in November, just further reassurance that the turnaround story is still on course.