Investors' Chronicle
Rolls Royce, banking stocks and Smith & Nephew: The Companies and Markets Show
Feb 28, 2025
James Norrington, author of a deep dive into Rolls-Royce, discusses the company's impressive recovery, marked by a return to dividends and a 20% share price jump. He highlights the transformation in its civil aviation sector amidst post-COVID growth. Meanwhile, Jemma Slingo analyzes the UK banking landscape, revealing mixed performance among major banks while emphasizing opportunities for future growth amid valuation challenges. Both guests tackle insights on Smith & Nephew and other medical tech firms, underscoring market dynamics and investment strategies.
30:14
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Quick takeaways
- Rolls-Royce is poised for significant growth through 2028, bolstered by improved operational efficiency and a commitment to shareholder returns.
- Smith & Nephew faces challenges in revenue recovery amidst activist investor pressures and pandemic-related impacts on elective surgeries.
Deep dives
Rolls-Royce's Positive Outlook
Rolls-Royce reported strong financial results, exceeding profit and cash flow expectations, which positively impacted its share price. The company anticipates substantial EBIT and free cash flow growth up to 2028, reflecting its improving operational efficiency and strategic initiatives. Key investments in technology have enhanced engine performance and reduced operational costs, further solidifying its competitive position in the aerospace sector. Additionally, the announcement of a dividend increase and a major buyback program demonstrates its commitment to returning value to shareholders while maintaining a robust growth trajectory.
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