J.P.Morgan slaps ‘sell’ rating on Rolls-Royce, shares drop
Lowering the stock to “underweight” from “equal-weight” in its first rating change since March last year, the U.S. bank said Rolls-Royce’s move implied weak confidence in the company’s biggest unit and could raise execution risks in the coming years. After being floored by the COVID-driven collapse in air travel in 2020, Rolls-Royce has tried to repair its balance sheet by cutting more than 1 billion pounds ($1.30 billion) in costs and said recently that it expected to be modestly cash flow positive for 2022 as airline customers fly again. The company has also sharpened its focus on developing less carbon-intensive hybrid, electric or hydrogen-powered engine options, which could eventually replace traditional engines.
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