Citi ups Rolls-Royce price target, cites 'clear route to much better cash flow'

The bank said it had taken a "deep dive" into the company’s underlying cash flow and the upside potential from the chief executive’s as yet unquantified turnaround plan and concluded that Rolls-Royce offers a continued strong investment performance.

It pointed to strong underlying cash flow improvement over the next five years, with over £1bn improvement coming from non-systemic elements dropping out. It also said a widebody recovery will turn the Civil Aerospace business and improve sentiment.

Citi said: "The results of the performance review, closing performance gaps and releasing working capital could give 65p further upside as new mid-term targets are unveiled in H2."

At 1355 GMT, RR shares were up 4.9% at 152.06p.