The great Rolls-Royce share price comeback is still underway as the sleeping giant finally wakes up. The shares climbed to 112.70p on Thursday, even after Boeing published mixed financial results. This price is the highest it has been since February 2022 and is slightly below the 61.8% Fibonacci Retracement level. It has also done better than most industrial stocks.
Boeing earnings report
The main driver for Rolls-Royce shares this week was the quarterly earnings by Boeing, one of the biggest players in the defense and aviation industries. In its report, the Washington-based company said that it made a loss for the year as the costs of doing business remained at an elevated level. On a positive side, the firm made its first positive free cash flow since 2018 before the 737-max crisis emerged.
Boeing and Rolls-Royce operate in the same industry but using different business models. Rolls-Royce manufactures engines and then makes money in long service contracts while Boeing builds aircraft for most airlines. The two are also big players in the defense industry. Therefore, investors look for Boeing earnings and financial performance to learn more about the state of the two industries. Boeing noted that its civil aviation business was extremely busy.
Rolls-Royce share price has mostly benefited with the Chinese reopening. In the past few months, we have seen the number of long-haul flights to the country soaring. And in a report published on Wednesday, it was reported that over 44k planes will be needed in China in the next 20 years. This could be a positive thing for Rolls-Royce since China is one of the biggest buyers of wide-body planes.
Rolls-Royce share price forecast
I have been had a relatively optimistic view about Rolls-Royce shares in the past few months and this view has been proven accurate. The stock bottomed at 64.24p in September and then embarked on a spectacular recovery. In December, the stock crossed the main hurdle at 94.62p, where it had struggled moving above several times.
It has also surged above the 50% Fibonacci Retracement level and formed a golden cross pattern on December 28. This cross happened when the 50-day and 200-day volume-weighted moving averages (VWMA) made a bullish crossover.
Therefore, the outlook for the stock is bullish with the next main target being at 117.18p, which is the 61.8% Fibonacci Retracement level. It was also the highest point on February 23 2022. The trend invalidation point for the trade will be at 107p.