Rolls-Royce share price popped by over 1% on Thursday as investors bought the recent dip after it launched its new modular gas engine power plants. RR jumped to a high of 1,260p from the year-to-date low of 1,190p.

Rolls-Royce Holdings stock rises ahead of earnings 

Rolls-Royce share price has been in a strong upward trend in the past few years, moving from a low of 34p during the pandemic. The company has done well in this period as demand for its products and services across its three businesses soared.

Rolls-Royce has benefited from the ongoing boom in the civil aviation industry, where most airlines have fully recovered from the COVID-19 pandemic. Its top clients are companies like Delta Airlines, Emirates, Cathay Pacific, British Airways, and Singapore Airlines.

The company’s other businesses are also doing well, with its power segment benefiting from the ongoing artificial intelligence (AI) boom. Also, it is benefiting from the ongoing renaissance of the European defense industry.

The most likely catalyst for the company is that it launched a new modular solution for gas engine power plants that will provide security of supply and accelerate the implementation of the German government’s power business. These power generation plants are available for backup and compensate for fluctuations in the feed-in from wind and solar.

The next major catalyst for the company is its upcoming financial results, which will provide more color on its performance in the second half of the year.

The most recent results showed that the company’s business did well in the first half of the year. Its revenue jumped to £9.07 billion in the first half of the year, while its operating profit jumped to £1.7 billion, while its free cash flow soared to £1.58 billion.

The management believes that the company’s business continued doing well in the second half of the year. Its last trading statement showed that its operating profit will be between £3.1 billion and £3.2 billion, while its free cash flow rose to between £3 billion and £3.1 billion.

Signs are that the company will publish stronger-than-expected financial results. A good example of this is General Electric Aerospace, its biggest competitor, which published strong financial results and boosted its forward guidance. GE Aerospace is Rolls-Royce’s biggest competitor.

Rolls-Royce share price technical analysis 

RR stock price chart |Source: TradingView  The daily timeframe chart shows that the Rolls-Royce stock price has done well as its business has continued booming after the pandemic.

It jumped to a record high of 1,307p in January and then pulled back to a low of 1,186p. It has remained above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls are in control. It also remains above the Ichimoku cloud and the Supertrend indicator.

A closer look shows that it has formed a bullish flag pattern, which is made up of a vertical line and a descending channel. It has moved above the upper side of the channel, validating the pattern.

Therefore, the stock will likely continue rising ahead of its financial results, which are scheduled on February 26. A move above the year-to-date high of 1,307p will point to more gains, potentially to the key level at 1,500p.

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