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Trending tickers: Rolls-Royce | Novartis | EasyJet | Barclays

The latest investor updates on stocks that are trending on Tuesday

A BR700-725 jet engine is seen at the assembly line of the Rolls-Royce Germany plant in Dahlewitz near Berlin, Germany, February 28, 2023.   REUTERS/Nadja Wohlleben
Rolls-Royce targets vast upturn in profits. Photo: Nadja Wohlleben/Reuters (Nadja Wohlleben / reuters)

Rolls-Royce (RR.L)

Shares in Rolls-Royce hit a four-year high after the UK engineering company set out new targets for operating profit.

The company now has a medium-term target to deliver operating profits between £2.5bn ($3.16bn) and £2.8bn. It is also aiming for free cash flow of £2.8bn to £3.1bn, with a return on capital between 16% and 18%.

Chief executive Tufan Erginbilgic, who took over in January, said: “We are creating a high performing, competitive, resilient and growing Rolls-Royce that will have the financial strength to control and shape its own destiny.

Read more: LIVE: FTSE and European stocks lower ahead of key EU inflation data

“We are confident in our ability to achieve these ambitions and have a clear and granular plan to deliver on our targets.”

The firm is targeting a leap in its civil aerospace margin to 15% to 17%, up from 2.5% last year.

It also plans to sell between £1bn and £1.5bn of assets over the next five years, including its electric plane arm.

Novartis (NVS)

Swiss pharmaceutical company Novartis lifted its sales growth guidance to 5% per year until 2027 after what it called "progress" in delivering its pure-play strategy.

The company said the new medium-term target would be driven by six drugs, led by breast cancer drug Kisqali.

Read more: Stocks that are trending today

“Novartis has now completed its transformation into a ‘pure-play’ innovative medicines company, delivering robust increases in core margin and free cash flow, while also continuing strong operational performance,” chief executive Vas Narasimhan said.

Novartis reiterated a core operating income margin of at least 40% by 2027, up from 35% last year.

EasyJet (EZJ.L)

Budget airline easyJet revealed it swung to an annual profit after a record summer.

The group reported pre-tax profits of £432m for the year to 30 September, against losses of £208m the previous year, seeing the group announce its first dividend payout to shareholders since the pandemic.

Underlying, or headline, profits stood at £455m against a £178m loss in 2021-22.

The company, which hasn't paid a dividend in three years, declared a final payout of 4.5p per share, amounting to £34m.

Read more: Shop prices may rise again, say retailers as inflation threat looms

Chief executive Johan Lundgren said: “Our record summer performance demonstrates the success of our strategy and that demand for easyJet remains strong as customers choose us for our network and value.

“We see a positive outlook for this year with airline and holidays bookings both ahead year on year and recent consumer research highlights that around three-quarters of Britons plan to spend more on their holidays versus last year with travel continuing to be the top priority for household discretionary spending.”

He also said the average air fare had risen by £9 from 2022.

Barclays (BARC.L)

Shares in Barclays were lower amid reports that the lender is in talks to buy a £3bn mortgage book from Metro Bank (MTRO.L) and news that it is exploring plans to drop thousands of investment banking clients.

Barclays boss C S Venkatakrishnan is under pressure to try and improve the bank’s profitability and its stock market valuation, the latter of which lags behind many peers.

The bank is looking at plans to cut ties with thousands of less profitable investment banking clients as part of that push, the Financial Times reported.

Barclays is also in exclusive talks to buy a £3bn residential mortgage book from Metro Bank as the troubled lender’s shareholders voted on a £925m refinancing package. The negotiations were reported by Sky News.

Watch: Earnings, consumer confidence, Fed remarks: What to Watch

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