Rolls-Royce was upgraded at Deutsche Bank last Thursday, with the bank seeing continued demand for travel in 2023.

The engine manufacturer was upgraded to Buy from Hold by Deutsche Bank analyst Christophe Menard. He also increased the group’s price target to 136p from 90p.

The analyst stated that as supply chain issues continue to linger, airlines will hold a heavy reliance on its existing fleets to keep up with continued demand in 2023. As a result, Rolls-Royce, who are the second largest manufacturer of aircraft engines, is well positioned to benefit from the increased demand, the analyst told investors in a research note.

In the group’s most recent trading update in November, Rolls-Royce kept its FY22 guidance unchanged, with the firm commenting on a continued recovery and large engine flying hours at 65% of 2019 levels.

Most recently, European airlines such as easyJet and Wizz Air reported results which saw significant growth in passengers, further reinstating the demand for travel despite the cost-of-living crisis. Rolls-Royce are looking well established to take advantage of this demand, following numerous years of travel restrictions.

Additionally, Rolls-Royce was upgraded to Neutral from Underperform at Exane BNP Paribas last week. Analyst Tristan Sanson stated that momentum still favoured aftermarket names in the aerospace and defense sector.