Berenberg: Rolls-Royce Remains 'Top Pick' in Civil Aerospace Amid Rising Flying Hour Growth

01:57 AM EDT, 08/18/2026 (MT Newswires) -- Berenberg affirmed Rolls-Royce Holdings (RR.L) as its "top pick" in the civil aerospace sector, citing the company's industry-leading engine flying hour growth and diversified offerings in defense and data center end markets. "Rolls-Royce's H1 results demonstrated broad-based strength across Civil Aerospace, Defence and Power Systems. The growth is sustainable and offers upside to medium-term consensus estimates, in our view. The core Civil Aerospace business continues to outperform; engine flying hour growth has exceeded European peers every month this year. The key is its younger Trent engine family, in our view. The current valuation is attractive, with the shares trading on a 4.4% [free cash flow] yield in 2028, 80bp cheaper than peers. We raise our EPS estimates by 10-15% and our price target to 1,900p [from 1,430p]," according to a Tuesday note on the civil aerospace sector. "Growth continues to be driven by the three newer Trent engines: the Trent XWB, Trent 1000, and Trent 7000. This well-diversified growth offers an attractive runway for further civil aftermarket outperformance, and stands in contrast to the more concentrated growth of its European peers," analysts added. Against this backdrop, the research firm made double-digit upward revisions to its full-year 2026 operating profit estimates across all three divisions of the aerospace, defense, and power systems company. For 2026, Berenberg also forecasts group operating profit of 4.85 billion pounds sterling and free cash flow of 4.08 billion pounds. The stock's buy rating is unchanged.