Analyst Upgrade and Share Reaction

Berenberg Securities upgraded Rolls‑Royce Holdings plc from a "hold" to a "buy" rating, increasing its price target to 1,430 pence per share from the prior target of 1,270 pence. The upgrade prompted the stock to climb 4.55% by 05:10 ET (09:10 GMT) on the day of the announcement. In the same session, Safran saw its share price rise 4.91% and MTU Aero Engines advanced 3.71%.

Peer Targets

Berenberg maintained a "buy" rating on Safran, setting a new price target of €355 per share. For MTU Aero Engines, the broker kept a "hold" stance with a target of €350, compared with the June 11 closing price of €306.70.

Flight‑Hour Growth and Fleet Profile

According to Cirium data, Rolls‑Royce’s programme‑weighted, thrust‑adjusted engine flying hours increased 5% year‑on‑year for the period January through May 2026. This outperformed Safran’s 2% increase and contrasted with MTU’s 1% contraction. The average thrust‑adjusted fleet age for Rolls‑Royce stood at 12 years, slightly younger than Safran’s 12.2 years and markedly younger than MTU’s 14.5 years. Engines younger than 10 years represented 51% of Rolls‑Royce’s adjusted fleet, versus 43% for Safran and 35% for MTU.

Wide‑Body Exposure and Capacity Outlook

Rolls‑Royce’s adjusted fleet is 92% wide‑body, a composition that insulated it from the capacity reductions affecting narrow‑body aircraft. Berenberg’s analysis of more than 50 airlines indicated a 2.8% reduction in narrow‑body capacity for the year, compared with a 2.4% cut for wide‑body capacity. The analysis assumes a 69% year‑on‑year rise in jet‑fuel prices to $152 per barrel in 2026. By contrast, Safran’s adjusted wide‑body exposure is 22% and MTU’s is 48%.

Regional Flying‑Hour Trends

On an adjusted basis, MTU’s Middle‑East flying hours fell 23% year‑to‑date, Safran’s declined 15%, while Rolls‑Royce experienced a smaller 7% drop.

Industry Profit Forecasts

The International Air Transport Association (IATA) reduced its 2026 airline‑industry net‑profit forecast by 44% to $23 billion, down from $41 billion, while the 2025 profit estimate remains at $45 billion. This downward revision incorporates the assumed 69% surge in jet‑fuel prices. IATA also expects Middle‑Eastern carriers to post a net loss in 2026 and lowered the 2026 available‑seat‑kilometre (ASK) growth forecast by 3.1 percentage points to 1.6%.

Financial Outlook for Rolls‑Royce

Berenberg raised its 2026 free‑cash‑flow projection for Rolls‑Royce by 3% to £3.77 billion and increased the underlying earnings‑before‑interest‑and‑taxes (EBIT) estimate by 2% to £4.05 billion. The analyst noted that the Defence and Power Systems divisions are expected to contribute approximately 43% of the group’s 2026 EBIT.