Rolls-Royce is being “woefully mispriced” according to analysts at Morgan Stanley (NYSE:MS), which sees a civil aerospace pick-up coming through much earlier than currently being priced in by the market.
That means an earnings recovery for Rolls-Royce is also much closer than the market has priced in and directly geared to the next leg of a global aviation recovery.
Shares in the aero engine and nuclear business are languishing around an 18-month low at 88.1p, but even though Morgan Stanley (NYSE:MS) has reduced its price target to 118p from 132p, it is bullish enough to upgrade its investment stance.
'Overweight' is now the rating from ‘equal weight’/hold previously.
Shares today were up slightly on a tough day for the FTSE 100.