Shares in Rolls-Royce Holdings, Safran and MTU Aero Engines rose by roughly 5% on Wednesday following a set of analyst moves from Berenberg that put Rolls-Royce under a more constructive spotlight. Berenberg upgraded Rolls-Royce to "buy" from "hold," and raised its price target on the British engineer to 1,430 pence from 1,270 pence.
As of 05:10 ET (09:10 GMT) on Wednesday, Rolls-Royce stock was up 4.55%, Safran gained 4.91% and MTU Aero Engines advanced 3.71%, according to the market snapshot cited by Berenberg. The bank also set a price target of €355 for Safran while maintaining a "buy" stance there, and kept MTU at "hold" with a target of €350 versus a June 11 close of €306.70.
Berenberg’s upgrade and target revisions were grounded in a flight-hour analysis based on Cirium data. On a programme-weighted, thrust-adjusted basis, Rolls-Royce’s engine flying hours rose 5% year-on-year in the January-through-May 2026 window, outpacing Safran’s 2% increase and MTU’s 1% contraction, the bank said.
The bank’s analysts noted two structural advantages for Rolls-Royce. First, the average thrust-adjusted fleet age for Rolls-Royce is 12 years, compared with 12.2 years for Safran and 14.5 years for MTU. Second, engines under 10 years of age make up a larger share of Rolls-Royce’s adjusted fleet - 51% - versus 43% for Safran and 35% for MTU. In the analysts’ words, "Rolls-Royce has the youngest engine fleet on a thrust-adjusted basis and has achieved the highest growth in flight hours ytd compared to European peers."
Berenberg also highlighted the composition of Rolls-Royce’s fleet as a protective factor. The company’s adjusted fleet is 92% widebody, a profile that buffered it from the capacity reductions concentrated on narrowbody aircraft. By contrast, Safran’s adjusted widebody exposure stood at 22% and MTU’s at 48%.
Across a sample of more than 50 airlines, Berenberg identified a 2.8% reduction in narrowbody capacity this year versus a 2.4% decline for widebody. Those shifts were modelled against an assumed 69% year-on-year rise in jet fuel prices to $152 per barrel in 2026, a scenario that materially affects airline capacity planning and operator economics.
Regional differences in flying hours were also apparent. In the Middle East, adjusted flying hours were down 23% year-to-date for MTU, 15% for Safran and 7% for Rolls-Royce, according to the bank.
The industry context Berenberg used included a significant downgrade to the 2026 profit outlook for airlines from the International Air Transport Association. IATA cut its 2026 airline industry net profit forecast by 44%, to $23 billion from $41 billion, against a 2025 industry profit of $45 billion, under the same 69% jet fuel increase assumption. IATA now expects Middle Eastern carriers to post a net loss and trimmed its 2026 available seat kilometre growth forecast by 3.1 percentage points to 1.6%.
On the company-level financials, Berenberg raised its 2026 free cash flow estimate for Rolls-Royce by 3% to £3.77 billion and increased underlying EBIT by 2% to £4.05 billion. The bank expects the Defence and Power Systems divisions to contribute roughly 43% of group underlying EBIT in 2026.
Key points
- Analyst action: Berenberg upgraded Rolls-Royce to "buy" and raised its price target to 1,430 pence, while setting a €355 target for Safran and keeping MTU at a €350 target.
- Fleet dynamics: Rolls-Royce leads peers on thrust-adjusted flight-hour growth (5% y/y Jan-May 2026) and has a younger adjusted fleet profile (average 12 years; 51% under 10 years).
- Market impacts: A modeled 69% rise in jet fuel to $152/barrel in 2026 influenced capacity forecasts and profit outlooks for airlines and aerospace suppliers.
Risks and uncertainties
- Jet fuel volatility: The analysis assumes a 69% year-on-year increase to $152 per barrel in 2026; such fuel-price movements directly affect airline capacity decisions and supplier demand.
- Regional demand shifts: The Middle East has shown sizable declines in adjusted flying hours for MTU and Safran, introducing earnings and aftermarket risk for suppliers with exposure to that market.
- Industry profitability: IATA’s downward revision to 2026 industry profits and lower ASK growth highlight macro demand uncertainty that could affect engine manufacturers and airline customers.
The share-price reactions and Berenberg’s revisions underscore how fleet composition and flight-hour momentum can influence investor and analyst assessments in a market where fuel costs and regional demand shifts are creating differentiated outcomes for engine makers and their customers.