Broker tips: Rolls Royce, Oxford Biomedica
By Iain Gilbert
Date: Tuesday 18 Aug 2026
(Sharecast News) - Analysts at Berenberg lifted their target price on Rolls‑Royce to 1,900p from 1,430p, citing the group's continued outperformance in engine flying hours and its strong positioning across civil aerospace, defence and power systems.
Berenberg said Rolls‑Royce was again the strongest performer in July, recording 5.7% programme‑weighted, thrust‑adjusted EFH growth year‑on‑year - ahead of Safran at 3.5% and MTU at 1.6%. Year‑to‑date, Rolls‑Royce has delivered 5% adjusted EFH growth, compared with 2.4% at Safran and a 0.4% decline at MTU.
Sequential growth also remained robust, with Rolls‑Royce posting a 9% month‑on‑month increase in July, driven by the Trent XWB and Trent 700 programmes. Berenberg also highlighted that the company's large‑engine fleet remained the youngest among European peers, with an adjusted average age of 11.9 years, supported by a high share of engines under ten years old. That profile, it added, underpins a durable medium‑term growth outlook.
The German bank noted that elevated jet‑fuel prices - still 55% to 65% above pre‑conflict levels across major hubs - continued to shape flying‑hour trends, but said Rolls‑Royce's exposure to newer, more efficient widebody engines provided resilience.
Berenberg reiterated Rolls‑Royce as its 'top pick', arguing the group was benefiting from powerful end‑market growth and self‑help measures across all divisions. It added that the shares remained attractively valued, trading on a 4.4% free‑cash‑flow yield in 2028 - around 80 basis points cheaper than peers.
Deutsche Bank downgraded Oxford Biomedica to 'hold' from 'buy' on Tuesday and slashed the price target to 595p from 800p as it revisited the investment case following the "disappointing" first-half trading update.
"While demand appears healthy, slower revenue conversion, programme delays and operational issues at Durham have materially reduced FY26 expectations and weakened visibility, particularly given the proximity to the June Capital Markets Day," it said.
"Despite a more supportive valuation (circa 3x EV/Sales), the burden of proof has shifted firmly towards execution."
Deutsche Bank said it was reducing FY26/FY27 revenue estimates by around 20%, with a materially greater impact on EBITDA and earnings per share.
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