(Bloomberg) -- Rolls-Royce Holdings Plc just extended its status as Europe’s best performing stock this year.

The shares rose as much as 7.5% on Tuesday after the UK maker of engines set ambitious targets for higher cash flow and return on capital. The stock has jumped nearly 180% this year, on track for the best year since its 1987 public listing, as a recovery in air travel propels demand for its engines.

Read: Rolls-Royce Plans Higher Cash Flow as CEO Pushes Efficiency

Significant headwinds facing the London-based company have turned into tailwinds, as a post-pandemic recovery in air travel has proved stronger than initially expected, with demand for long-haul jets propping up demand for Rolls-Royce’s engines.

The surge dwarfs the continent’s other key stock-market event of the year: Novo Nordisk’s climb to become Europe’s most valuable firm in 2023 on the back of its blockbuster weight-loss and diabetes drugs Wegovy and Ozempic. The stock has gained 48% year to date.

Novo Nordisk’s market value greatly overshadows Rolls-Royce’s, with the Danish pharmaceutical giant weighing in at 3,139 billion Danish kronor ($460 billion) versus the British firm’s £22 billion ($28 billion).

On Tuesday, analysts lauded Rolls-Royce’s new financial targets, with Morgan Stanley’s Ross Law saying the publication “outlines an ambitious yet credible strategy” across the company’s four main pillars. He reiterated his outperform rating on the stock.

UBS Group AG analyst Ian Douglas-Pennant said the new targets imply about a 7% upside to consensus estimates for adjusted Ebit and more than 30% to free cash-flow.

--With assistance from James Cone and Joel Leon.

(Adds comparison with Novo Nordisk in fourth and fifth paragraph)

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