The Rolls-Royce share price tilted higher on Tuesday as investors remained optimistic about the aviation sector. The RR stock also rose after the relatively positive quarterly results from General Electric. It ended the day at 98.27p, which was about 13% above the lowest level this month.
Rolls-Royce news. The biggest catalyst for the Rolls Royce share price today will be the relatively quarterly results by General Electric. GE is the company’s biggest competitor. In a report, the company said that its revenue surged by 9% to more than $18.3 billion in the second quarter.
This performance was driven by the company’s healthcare and aviation business. Most importantly, aviation orders rose by 47% after they declined by 26% in the first quarter. This sends a signal that Rolls-Royce too will benefit from the aviation recovery. Still, the company warned about the rising inflation as parts prices rise.
Further, the company said that its free cash flow target of $7 billion will be reached in 2023. Therefore, these earnings could help propel the Rolls-Royce share price higher ahead of its upcoming quarterly results.
As a result, the GE stock price jumped by more than 1% to $13, bringing its total market capitalization to more than $114 billion. This is substantially higher than RR, which is valued at about $11.3 billion. Analysts at GE, Barclays, and Credit Suisse also boosted their calls on GE.
The stock will also react to the upcoming results from some of its key customers like British Airways owner IAG. The firm will release its results on Friday.
Rolls-Royce share price forecast
My recent articles on the Rolls-Royce share price have been relatively accurate. For example, I recently warned that the stock would decline to about 85p. This prediction was right as the stock fell to 86.6p last week. Now, there are signs that the stock will bounce back. It has already moved above the 23.6% retracement on the four-hour chart. Also, it has risen above the 50-day and 25-day moving averages and formed a bullish flag pattern.
Therefore, I suspect that the RR stock will climb to the 50% retracement at 107p ahead of earnings. However, a drop below 90p will invalidate this view.
Don’t miss a beat! Follow us on Telegram and Twitter.
RR share price chart
Follow Crispus on Twitter.