RE: Deutsche Bank raises Rolls-Royce price target to 310 (210) pence - 'buy'17 Nov 2023 19:57
NTC > To be fair Standard & Poor's (S&P) has not yet announced a timeline for when it will upgrade Rolls-Royce to investment grade. However, the company has been making progress in recent months that could lead to an upgrade in the near future.
In October 2023, RR reported a third-quarter underlying operating profit of £173 million, up from £133 million in the same quarter of 2022. The company also raised its full-year underlying operating profit guidance to £450 million-£500 million, up from £400 million-£450 million previously.
RR improving financial performance is a key factor that S&P will consider when deciding whether to upgrade the company to an investment grade. Other factors that S&P will consider include RR debt levels, its free cash flow, and its long-term growth prospects.
Analysts believe that RR could be upgraded to investment grade as early as 2024. However, the timing of an upgrade will ultimately depend on the company's continued financial performance and the overall market environment.
Here are some of the factors that could lead to an upgrade of RR to investment grade:
Continued improvement in RR financial performance
Reduction in RR debt levels
Increase in RR free cash flow
Improvement in the overall market environment
Here are some of the factors that could delay an upgrade of RR to investment grade:
A deterioration in RR financial performance
An increase in RR debt levels
A decrease in RR free cash flow
A worsening of the overall market environment
Overall, the outlook for RR is positive. The company is making progress in improving its financial performance and reducing its debt levels. If RR can continue to make progress on these fronts, it is likely to be upgraded to investment grade in the near future.