Rolls Royce share price has been among the standout performers in the year to date, jumping 53.39%, buoyed by the company’s full-year results released in February and the rise in the company’s profit guidance for the year. Even so, the company has been trading sideways for the past two months. At the time of writing, the RR stock price was trading 2% lower at 145.35p.
Rolls Royce share price slipped 6.65% last week on Thursday as investors chewed on the company’s trading statement and the interest rate decision by the Bank of England. Rolls Royce Holdings Plc published its trading update for the first quarter earlier on Thursday.
According to the British aerospace company, its performance for the first quarter met expectations on the back of a recovery in flying hours and steps taken by its new CEO to find savings, putting the company on track to meet its 2023 expectations. The update shows that the company’s long-term large engine flying hours surged to 83% of 2019 levels in the four months to April 30.
Additionally, the company highlighted that its civil aviation business was performing well against the backdrop of a new order win for its civil aerospace unit. The unit provides engines for Airbus A350 and Boeing 787 planes. The company’s new order will see Rolls Royce supply 68 of its Trent XWB-97 engines to Air India.
The order will help put the company on track to meet its operating profit guidance for 2023 of between £800 million-£1 billion. The company would also meet its free cash flow guidance of between £600 million to £800 million.
Despite Rolls Royce’s upbeat guidance for 2023, the Rolls Royce share price dipped largely during Thursday’s trading session. The shares were also likely reacting to the 25-basis point interest rate hike by the Bank of England (BoE) later that day.
Rolls Royce Share Price Forecast
Rolls Royce share price has been among the best performers in UK’s bluechip FTSE 100 index for the past few months. Despite the 53% jump in the year to date, the stock’s prices remain volatile amid macroeconomic concerns. Even so, the RR stock has managed to remain above the 50-day and 200-day exponential moving averages (EMA) as highlighted on the daily chart. Its Relative Strength Index (RSI) has moved below the neutral zone.
Therefore, the Rolls Royce share price is likely to continue falling in the subsequent sessions as it struggles to find direction. As such, an increase in the selling pressure might run the bulls out of gas, pushing the price lower to find support at 139.50p. Conversely, a flip of the important resistance level of 156.65p will invalidate this view.