Rolls-Royce PLC (LON:RR.) investors have become used to profit warnings in recent months but that might be about change suggests Citigroup.
On the back of a new cash-driven way of valuing the engineers, the US broker has upgraded aeroengine maker Rolls to a buy.
Citi has set a new target price 935p, driven by long-term cash generation potential while the revenue recognition change has also now been quantified.
BAE Systems (LON:BA.) also gets a bump-up to buy on the new methodology with its target price now 630p. A steady, yield stock concludes Citigroup.
Shares in Rolls edged up to 709p, while BAE was unchanged at 534p.