JPMorgan Projects 20% Upside for Rolls-Royce Stock Amid Chinese Expansion and Power Systems Milestones

JPMorgan has increased its price target for Rolls-Royce from 1,245 to 1,320 pence, indicating a potential upside of approximately 20% from the current price of around 1,100 pence. The aircraft engine manufacturer has reported progress in its expansion into China and advancements in its power systems segment.

Rolls-Royce's joint venture, Beijing Aero Engine Services Limited, has commenced operations with a goal to achieve 250 engine overhauls per year by 2034. The company has also delivered its first mtu emergency power generators with verified Environmental Product Declarations to a European data center operator.

Additionally, Rolls-Royce secured a large order for over 300 mtu engines for Leopard-2 tanks, ensuring a backlog in its defense business until 2026. The management aims for adjusted operating profit between £3.1 and £3.2 billion in 2025, reflecting successful transformation efforts.