Research Update: Rolls-Royce PLC 'BBB-' Ratings Affirmed; Outlook Revised To Stable On Forecast Improvement In Financial Performance

After two difficult years (2018 and 2019), we forecast that U.K.-based engine manufacturer Rolls-Royce PLC's profitability, core cash flows, and credit metrics will significantly improve through 2020 and 2021. Furthermore, since our last publication on the company, the Conservative Party achieved a clear majority in a U.K. general election, while the Withdrawal Agreement Bill received Royal Assent, diminishing the risk of a no-deal Brexit. We now believe that Rolls-Royce is well positioned to deliver against our expectations. We are therefore revising our outlook to stable from negative, and affirming our 'BBB-/A-3' ratings on the company. The stable outlook reflects our expectation that Rolls-Royce will continue to deliver on its business strategy, grow revenues, and improve profitability, cash flows, and credit

...- After two difficult years (2018 and 2019), we forecast that U.K.-based engine manufacturer Rolls-Royce PLC's profitability, core cash flows, and credit metrics will significantly improve through 2020 and 2021. - Furthermore, since our last publication on the company, the Conservative Party achieved a clear majority in a U.K. general election, while the Withdrawal Agreement Bill received Royal Assent, diminishing the risk of a no-deal Brexit. - We now believe that Rolls-Royce is well positioned to deliver against our expectations. - We are therefore revising our outlook to stable from negative, and affirming our '###-/A-3' ratings on the company. - The stable outlook reflects our expectation that Rolls-Royce will continue to deliver on its business strategy, grow revenues, and improve profitability, cash flows, and credit metrics....

Research Update