Broker snap: Rolls-Royce to see strong growth in 2011

11th Feb 2011 13:01

Valuation levels at Rolls-Royce are starting to look more compelling, according to Nomura, which reiterates its positive stance on the engine maker.The group delivered solid results yesterday, with profits 4% better than expected, despite challenging market conditions and the £56m financial charge related to the Trent 900 engine failure."We continue to think that 2011 earnings risk is biased to the upside from what could be a stronger than expected rebound in commercial aerospace aftermarket sales and renewed strength in the offshore part of the marine division," says analyst Jason Adams.Given the company's strong top-line growth outlook and pricing power, the broker believes Rolls should trade at a premium to the wider industrials sector.The Japanese broker keeps its 'buy' rating and target price of 725p.