The Rolls-Royce share price (LON: RR) has made an impressive start to the year, gaining 15 percent in the first four weeks. The huge price surge comes at a time when the company continues to make changes in its operations.
In a statement from the new boss of Rolls-Royce, Tufan Erginbilgic, he described the company as a burning platform. He also added that the 117-year-old company’s current performance was unsustainable, terming the current period as the last chance to change its trajectory, criticizing its previous investment decisions, which he said had destroyed its value.
Why is the Rolls-Royce Share Price Rising?
There are many reasons that are behind the current Rolls-Royce price surge, with the most obvious one being the resurgence of the aviation industry. The company derives most of its from civil aviation, where it is involved in servicing its aircraft engines. Therefore, as the aviation industry continues to recover, Rolls-Royce expects to see its core business of manufacturing and maintaining commercial jet engines.
Another reason Rolls-Royce’s share price is performing well this year is the continued reopening of China. As market analyst Susannah Streeter of Hargreaves Lansdown stated, there are high hopes that the reopening will mean more business opportunities for the company as the aviation industry in China recovers.
Rolls-Royce Share Price Forecast
As seen from the above analysis, Rolls-Royce’s chances of recovery are looking positive. However, there are still concerns about possible recession in the UK and the global economy; the company also continues to struggle with debts, which in September, stood at £4bn.
However, on the technical side of things, Rolls-Royce continues to show huge signs of a continuation of the current bullish trend. With price action showing a 15 percent price surge this month and indicators such as the Williams Alligator continuing to give a bullish signal, it is highly likely we might see the bullish trend continue.
My Rolls-Royce share price expectation is for it to trade above the 120p price level in the coming sessions. For the long term, I expect it to trade above the 150p price level in the coming months.