Rolls Royce share price enters its correction phase after making a 6.6% move towards 218p earlier this week. This rally can be attributed to the Israel-Hamas conflict, as many military aircraft are powered by Rolls Royce jet engines. The shares of the British jet engine manufacturer are trading at 211.4p and are down 1.95% today.
On Wednesday, UK stocks are experiencing a sharp sell-off after UK reported more than expected inflation data. The country reported a 6.7% YoY inflation, 0.1% more than the forecasted figure. As a result, the FTSE 100 index fell 60 points as the likelihood of the rates remaining high for longterm increased.
Rolls Royce Announces Job Cuts To Improve Efficiency
In a drastic turn of events, Rolls Royce announced that it would cut around 2,500 non-engineering jobs globally. The 6% reduction in the British company’s workforce will not only lead to better business efficiency but will also help improve its cash flow and reduce its debts. The jet engine manufacturer can save up to 200 million pounds if it goes ahead with the plan.
Société Générale, a French bank upgraded its price forecast for Rolls Royce shares. The broker set 241p as its new target from its previous 207p while maintaining its “hold” rating. The shares of the jet engine maker have been among the best-performing stocks of 2023, soaring an incredible 144% since the beginning of 2023.
Rolls Royce Share Price Outlook
LON: RR bounced about 7% from its October lows. However, this bounce failed to materialize into a stronger rally as the share tumbled 3.6% from 218p. This correction is further supported by the bearish sentiment experienced in the FTSE 100 index as the benchmark index failed to break above the 7680 points resistance level today.
The Rolls Royce share price prediction is on the brink of flipping bearish if the price breaks below the 210p support level. In this case, the bears can drag the price all the way down to the key psychological level of 200p.
LON: RR Technical Analysis
