FTSE 100: Rolls-Royce shares performing best out of the 2023 gate
After losing almost 48% in 2022, Rolls-Royce tops the leader board at the start of the new year. The aero engine maker was one of the gainers at the start of 2022 then lost its buoyancy.
(Video Transcript)
Rolls-Royce one to watch in 2023?
Could the aero engine maker Rolls-Royce be one of the stocks to watch in 2023?
Share price chart
It certainly got off to a good start as we opened the account for this new year. And in fact, if we look at the share price chart in the context of where we were pre-Covid, this stock was well above where we are pre-Covid, all the way up at £6.70. Here we are now at 98.7 pence.
Now, this red box explains what happened during 2022. It opened very strongly at the beginning of last year, like indeed, it has done at the beginning of this year, but then subsequently lost around about 47% of its entire market cap. Since the lows we had back on the 20th of September, it's gained 54 and a quarter percent. And you can see it culminating in the most recent trade today. And we're currently up 6.24%.
The company has a number of different strands to it. There are hopes that the aero engine business may start to lift off again as we see a return to the air from what has been a very difficult two or three years for these travel companies and airlines, who not just use the Rolls-Royce engines, but also have big servicing contracts.
Rolls-Royce is also taking part of this upside because of the increased defense spending. The company has also been benefiting from that. Adding to this as well, the fact that Rolls-Royce has identified four priority sites, the deployment of its small modular nuclear reactors in the UK, something else that many people believe that Rolls-Royce will be able to benefit from.
So starting the year strongly, where it goes from here remains to be seen. But at the moment, at least, it's one of the leading gainers on the FTSE 100 after two hours of trade on the market so far in 2023.
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