Rolls Royce share price has been performing very well since the start of the year. The shares of the luxury car manufacturer have surged by a tremendous 155% in 2023. However, the shares are currently facing a pullback due to the recent downtrend in the UK and US stocks.
LON: RR is trading in the red on Wednesday, which can be attributed to the deteriorating investor sentiment in UK equities. The FTSE 100 index extended its weekly loss and was down 0.18% on Wednesday.
Rolls Royce Extends Contract With Senior PLC
On 27 September, The Aerospace division of Senior PLC announced an extension of 12 years in its contract with Rolls Royce. The British jet engine manufacturer will start to receive precision-machined structures and components from 2026. Rolls Royce shares are down 1.54% in the weekly timeframe.
A week earlier, Société Générale announced its revised price target of £2.41 for Rolls Royce Holdings. This was an increase from the previous target of £2.07. The French investment bank also held its “hold” rating for the shares of British aviation giant. With this news, Rolls Royce has gotten rid of all the sell ratings for the first time in 17 years.
Rolls Royce Share Price Forecast
The share price of LON: RR is currently in its correction phase after it was rejected from the 228p level. A recovery in the FTSE 100 index might trigger another rally towards the 250p demand zone. This demand zone, shown as a green box on the chart lies at a critical level as it lies close to the 0.618 fib retracement.
However, a breakdown below 213p will invalidate the above-discussed scenario and will turn the Rolls Royce share price forecast bearish. In this case, I expect the price to retest the upward trendline, which has been acting as a strong support since October 2022.
