Rolls-Royce share price has been in a strong uptrend this year, and is now hovering at its all-time high. Its performance has stalled recently as some investors book profits as they wait for the upcoming financial results. Here are the top catalysts for the stock this month.
Rolls-Royce to react to earnings
The Roll-Royce share price will be in the spotlight in the coming days as investors react to its trading update, which will happen on November 13.
These results will provide more information about its growth across its key divisions during the quarter.
The most recent results showed that the company’s operating profit rose by 50% to £1.7 billion. Its operating margin improved by 4.9 points, with its margin growing to 19.1%.
This growth was spread across all segments, including civil aerospace, defence, and power systems. Its half-year revenue rose by 13% to £9 billion, while its gross margin expanded to 28.4%, with its operating profit rising by 50% to over £1.7 billion.
The results showed that its civil aviation revenue rose by 17% to £4.78 billion, while the gross profit jumped by 50% to £1.47 billion.
Its defense business also held steady in the first half of the year, with its revenue rising to £2.2 billion. The power systems rose by 20% to over £2.04 billion.
Therefore, the upcoming trading statement will provide more color on whether its business is thriving as analysts expect. The most recent consensus numbers show that analysts expect the underlying revenue will be £19.5 billion, while its earnings before interest and tax (EBIT) and the profit before tax (PBT) will be £3.26 billion and £3.14 billion, respectively.
Analysts anticipate more growth in the future, with its 2026, 2027, and 2028 revenues expected to be £21.5 billion, £23 billion, and £25.3 billion, respectively. One sign that its results will be strong is the recent GE Aerospace earnings, its biggest competitor.
SMR business growth
The next potential catalyst for the Rolls-Royce share price will be it small nuclear reactor business. In a statement last week, the company said that it had reached a deal with BWXT, a Canadian company.
This deal will see the company produce steam generators from BWXT as it accelerates its business.
Investors are waiting for more information about this business as the growth accelerates. In August, the FT reported that the unit was exploring funding for the unit, including an IPO. Such a move would see it compete directly with other similar firms like Oklo and NuScale.
The third main catalyst for the company will be the Dubai Airshow, where it will be exhibiting. This is an important event that allows companies in civil aviation and defense to reach deals worth millions or billions.
Rolls-Royce share price technical analysis
The daily timeframe chart shows that the Rolls-Royce stock price has been in a strong bull run this year. It is now nearing the key resistance point at 1,193p, its highest level in September.
Rolls-Royce share price remains above the 50-day and 100-day Exponential Moving Averages (EMA). However, it is now forming a double-top pattern, pointing to a potential pullback. A move above the double-top point will invalidate the bearish view.
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