Rolls Royce shares set to nearly double by 2020, hedge-fund manager says

Shares in Rolls Royce might be set to nearly double in value by 2020 as the manufacturer gains more market share and cash flow growth accelerates, a hedge-fund manager said.

According to Bloomberg, Eashwar Krishnan, from Tybourne Capital Management, said the firm was at an inflection point in its business cycle, so investors looking at its current low cash flows were being misled.

Following heavy investment to develop new engines, Rolls Royce was now ramping up its deliveries, the fund manager said.

Krishnan was speaking at the Sohn Conference on Wendesday.

He believed Rolls could double its market share over the next five to seven years as carriers upgraded in order to become more efficient.

The company's cash flows were also set to improve, rising to £1.5bn by 2020 versus a consensus forecast for just £800m.