- Rolls-Royce share price up 3.8%.
- According to the CEO, the worst is over as the stock beats analyst targets.
- Could the DHL deal make up for the loss of travel revenue?
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Rolls-Royce stocks have suffered from the pandemic. From a high of 229.92 pence in February 2020, the share price fell 62% to 86.34 pence in just a few weeks. The bearish run lasted until October 2020 when Rolls-Royce stocks bottomed at 38.98 pence. Progress has been slow since then, but recent business developments could help the price of Rolls-Royce stock gain momentum.
How much have Rolls-Royce stocks risen this week?
Rolls-Royce shares opened today at 104.64 pence. That’s up 3.8% from a weekly low of 100.76 pence. This slight upturn comes at a time when Rolls-Royce is looking to a more profitable year 2022. The return of long haul flights, a market where Rolls-Royce engines are vital, should return towards the end of the year. However, it is the latest deal with DHL that could help Rolls-Royce stocks in the coming months.
With the deal announced at the end of April, DHL will use Rolls-Royce’s TotalCare service. This means that Rolls-Royce engineers will service the Trent 700 engines that power the logistics company’s eight Airbus A330s. The deal also includes all new Trent 700 engines that will be added to the fleet.
One potentially interesting aspect of the business is that it is based on a dollar-per-hour flight model. This makes it difficult to determine the total value. However, according to Geoff Kehr, senior vice president of global fleet management at DHL, this should improve the efficiency and performance of both companies.
‘TotalCare gives us the ability to maintain our Trent 700 fleet to world class reliability standards. This saves time and resources so DHL can focus on other aspects of fleet maintenance and operations. ‘
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What else could help the Rolls-Royce share price?
In addition to a contract with DHL, Rolls-Royce engines are also used to power the new luxury jet from Dassault Aviation SA. The Falcon 10X will be the company’s largest and fastest private jet and should be operational by 2025. This is the first time Dassault has used Rolls-Royce as an engine supplier, which could signal the beginning of a new relationship.
However, the outlook for Rolls-Royce shares is still uncertain in the near future despite the reopening of flight routes. CEO Warren East said in March that the “worst” was behind the company after posting a £ 4 billion loss.
Bank of America analysts seem to agree. They issued a Rolls-Royce stock price target of 80p in March, an increase from the previous level. That number has already been exceeded, as has the price target of 97p set by analysts at Deutsche Bank. Rolls-Royce isn’t clear, but the recent deals may have a positive impact and help improve cash flow rather than getting long-haul travel back to normal in 2022.
Will the latest deals boost Rolls-Royce stock?
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