Rolls-Royce Holdings plc

DB:RRU Stock Report

Market Cap: €55.5b

Rolls-Royce Holdings Valuation

Is RRU undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of RRU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RRU (€6.59) is trading below our estimate of fair value (€14.25)

Significantly Below Fair Value: RRU is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RRU?

Key metric: As RRU is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for RRU. This is calculated by dividing RRU's market cap by their current earnings.
What is RRU's PE Ratio?
PE Ratio19.8x
EarningsUK£2.33b
Market CapUK£46.11b

Price to Earnings Ratio vs Peers

How does RRU's PE Ratio compare to its peers?

The above table shows the PE ratio for RRU vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average27x
RHM Rheinmetall
39.2x29.0%€26.9b
MTX MTU Aero Engines
24.2x10.7%€17.1b
OHB OHB
12.7x11.0%€886.8m
ENR Siemens Energy
31.9x23.5%€37.8b
RRU Rolls-Royce Holdings
19.8x-0.09%€46.1b

Price-To-Earnings vs Peers: RRU is good value based on its Price-To-Earnings Ratio (19.8x) compared to the peer average (27x).

Price to Earnings Ratio vs Industry

How does RRU's PE Ratio compare vs other companies in the European Aerospace & Defense Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
RRU 19.8xIndustry Avg. 24.6xNo. of Companies9PE020406080100+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: RRU is good value based on its Price-To-Earnings Ratio (19.8x) compared to the European Aerospace & Defense industry average (24.2x).

Price to Earnings Ratio vs Fair Ratio

What is RRU's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RRU PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio19.8x
Fair PE Ratio18.6x

Price-To-Earnings vs Fair Ratio: RRU is expensive based on its Price-To-Earnings Ratio (19.8x) compared to the estimated Fair Price-To-Earnings Ratio (18.6x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst RRU forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€6.59
€6.55
-0.6%
21.5%€8.39€2.87n/a17
Nov ’25€6.62
€6.39
-3.5%
20.4%€7.94€2.87n/a17
Oct ’25€6.46
€6.36
-1.6%
20.5%€8.02€2.85n/a17
Sep ’25€5.91
€6.36
+7.6%
20.5%€8.02€2.85n/a17
Aug ’25€5.60
€5.72
+2.2%
19.5%€7.12€2.85n/a17
Jul ’25€5.41
€5.61
+3.7%
19.7%€7.07€2.83n/a17
Jun ’25€5.21
€5.27
+1.1%
18.4%€7.05€2.82n/a17
May ’25€4.95
€5.15
+4.1%
17.0%€6.39€2.79n/a17
Apr ’25€5.00
€5.13
+2.5%
16.6%€6.41€2.80n/a17
Mar ’25€4.39
€4.71
+7.3%
14.6%€6.08€2.80n/a18
Feb ’25€3.51
€4.13
+17.9%
14.8%€5.03€2.80n/a18
Jan ’25€3.45
€3.70
+7.1%
26.9%€5.00€1.16n/a18
Dec ’24€3.20
€3.31
+3.6%
24.4%€4.67€1.17n/a17
Nov ’24€2.50
€2.68
+7.0%
23.6%€4.02€1.15€6.6217
Oct ’24€2.55
€2.68
+4.9%
23.5%€4.05€1.16€6.4617
Sep ’24€2.57
€2.67
+4.0%
23.8%€4.08€1.17€5.9117
Aug ’24€2.15
€2.07
-3.9%
27.4%€3.02€1.05€5.6017
Jul ’24€1.75
€1.81
+3.2%
28.4%€2.98€1.05€5.4118
Jun ’24€1.73
€1.80
+3.8%
30.4%€2.97€1.05€5.2116
May ’24€1.72
€1.71
-0.8%
30.3%€2.88€1.02€4.9515
Apr ’24€1.69
€1.66
-1.4%
32.8%€2.90€0.85€5.0016
Mar ’24€1.67
€1.41
-15.5%
24.6%€1.99€0.85€4.3916
Feb ’24€1.20
€1.17
-2.4%
23.1%€1.67€0.60€3.5115
Jan ’24€1.05
€1.11
+5.5%
18.2%€1.71€0.82€3.4515
Dec ’23€1.04
€1.09
+5.3%
19.5%€1.70€0.69€3.2015
Nov ’23€0.97
€1.07
+10.4%
20.5%€1.70€0.69€2.5014

Analyst Forecast: Target price is less than 20% higher than the current share price.

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