Detailed H1 results release confirms message of the trading update Rolls-Royce released its final H1 results, in line with its July 26 trading update, with an underlying EBIT of GBP673m (GBP660m-680m guided) against a backdrop of strong flight hours but a complex execution environment. H1 FCF was GBP356m (GBP340-360m guided) despite GBP600m inventory headwind. The results added granularity on the Civil Aerospace mix, with frontloaded spare engine deliveries (GBP100m tailwind est. in H1, which should reverse in H2), a relatively modest reduction in provisions for onerous contracts (GBP35m, a sign of slightly slow progress vs our hopes), a positive LTSA catch up of GBP70m, and a 27% increase in large engine shop visits. Model overhauled for stronger delivery of earnings and cash Our revised EPS include a full reshuffle of Civil Aerospace profits forecast factoring in price increases and cost control in line with the upgraded guidance of the trading update: 2023 underlying operating profit of GBP1.2-1.4bn (vs previous guidance of GBP0.8-1bn) and FCF guidance to GBP0.9bn-1.0bn (vs previous guidance of GBP0.6-0.7bn). We remove any dividend payment this year, as shareholder cash return will be considered only once back to investment grade. Neutral stance maintained - what we would need to turn buyers It is indisputable that the new CEO has been able to infuse a sentiment of urgency in the group that allows to impose drastic cultural changes. Early benefits are surprising on the upside but sustainable transformation will take much longer. Visibility remains limited on the group''s trading environment (power systems order, supply chain recovery) and the extent of margin improvements to come on existing long-term maintenance agreements. Based on our 2025 forecast, the company seems fairly valued. This is reflected by our upgraded TP at 196p (up 19p for stronger cash, 7p for lower time discount, the rest stemming from earnings upgrade mostly in civil...