Investors advised to ‘buy’ Rolls Royce as contract wins support growth prospects

As Rolls Royce updates the market Helal Miah, investment research analyst at The Share Centre, explains why he recommends investors ‘buy’ the stock.
 
“Investors will be pleased with Rolls Royce’s interim management statement this morning which announced the company is still trading in line with management expectations. Investors will welcome the Japan Airlines order of 31 Airbus aircraft which will use the company’s Trent XWB engines.
 
“Rolls Royce has won multiple contracts in the troubled Defence Aerospace sector with the US government worth of $600m and expectations for the division have now been upped from broadly flat to modest growth. However, management have downgraded their expectations for the smaller Marine division and now expect no growth for the full year.
 
“With the recent re-structure, cash inflow and long term service contracts growth looks set to improve. We continue to recommend Rolls Royce as a ‘buy’ for long-term investors seeking a medium level of risk. However, with the share price once again nearing all-time highs, investors would be advised to drip feed into the stock.”