Wednesday 27 November 2019 4:21 pm

Rolls-Royce shares move down a gear as analysts cut rating

Rolls-Royce shares have fallen 2.8 per cent today, after analysts on both sides of the Atlantic lowered their rating of the firm’s stock.

Analysts at Morgan Stanley cut their rating to a neutral “equal-weight” assessment.

Read more: ‘Hailstorm’ of jet engine fragments cause chaos in Rome

They said the firm’s weaker underlying cash flow was likely to continue for the coming months, as it tries to fix problems with its Trent 1,000 engine.


The engine model supplies Boeing 787 jets, but has struggled with reliability problems over the last few years.

Over the summer, this led to one terrifying episode in which pieces of the red hot engine fell from a plane flying over Fiumicino, an Italian airport town near Rome, sending residents diving for cover.

In August, chief executive Warren East told City A.M. he hoped he would be able to draw a line under it in early 2020. “But I can’t guarantee that,” he added.

“It is still possible that there will be some other issue. These engines are complex interactive systems … you really are pushing the physics to the limit and there are always going to be some uncertainties.”

Separately, S&P downgraded its long term rating of the firm to BBB, and reiterated its negative outlook.

Yesterday, Rolls-Royce announced a five year contract worth $1.2bn to maintain military aircraft engines for the US armed forces.

The company has delivered nearly 1,000 engines to power the US fleet of V-22 aircraft in operation across the globe.


Paul Craig, Rolls-Royce, president of services, said: “Rolls-Royce has supported the warfighter and these remarkable, revolutionary aircraft since they entered service in 2007.

Read more: Rolls Royce share price suffers as it reveals engine setback

“Our Missioncare services model ensures the warfighters are focused on their missions, not their engine availability.

“Rolls-Royce is proud to serve the Marine Corps, Navy and Air Force and contribute to the success of V-22 missions around the world.”

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