Rolls-Royce Holdings plc

BATS-CHIXE:RRL Stock Report

Market Cap: UK£49.7b

Rolls-Royce Holdings Valuation

Is RRL 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 RRL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RRL (£5.86) is trading below our estimate of fair value (£11.08)

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

Key Valuation Metric

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

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

The above table shows the Price to Earnings ratio for RRL. This is calculated by dividing RRL's market cap by their current earnings.
What is RRL's PE Ratio?
PE Ratio21.3x
EarningsUK£2.33b
Market CapUK£49.73b

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for RRL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average17.5x
BA. BAE Systems
18.7x8.0%UK£34.5b
QQ. QinetiQ Group
16.9x15.1%UK£2.4b
BAB Babcock International Group
13.2x14.2%UK£2.5b
CHG Chemring Group
21x17.1%UK£898.3m
RRL Rolls-Royce Holdings
21.3x-0.9%UK£49.7b

Price-To-Earnings vs Peers: RRL is expensive based on its Price-To-Earnings Ratio (21.3x) compared to the peer average (17.5x).

Price to Earnings Ratio vs Industry

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

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
No. of Companies7PE020406080100+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: RRL is good value based on its Price-To-Earnings Ratio (21.3x) compared to the European Aerospace & Defense industry average (24.6x).

Price to Earnings Ratio vs Fair Ratio

What is RRL'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.

RRL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio21.3x
Fair PE Ratio22.2x

Price-To-Earnings vs Fair Ratio: RRL is good value based on its Price-To-Earnings Ratio (21.3x) compared to the estimated Fair Price-To-Earnings Ratio (22.2x).

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 RRL forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£5.86
UK£5.74
-2.0%
23.5%UK£8.50UK£2.40n/a18
Dec ’25UK£5.58
UK£5.65
+1.2%
24.1%UK£8.50UK£2.40n/a17
Nov ’25UK£5.48
UK£5.35
-2.3%
20.4%UK£6.65UK£2.40n/a17
Oct ’25UK£5.26
UK£5.35
+1.7%
20.5%UK£6.75UK£2.40n/a17
Sep ’25UK£4.98
UK£5.35
+7.5%
20.5%UK£6.75UK£2.40n/a17
Aug ’25UK£4.79
UK£4.82
+0.6%
19.5%UK£6.00UK£2.40n/a17
Jul ’25UK£4.54
UK£4.76
+4.9%
19.7%UK£6.00UK£2.40n/a17
Jun ’25UK£4.53
UK£4.48
-1.1%
18.4%UK£6.00UK£2.40n/a17
May ’25UK£4.09
UK£4.44
+8.4%
17.0%UK£5.50UK£2.40n/a17
Apr ’25UK£4.27
UK£4.40
+2.9%
16.6%UK£5.50UK£2.40n/a17
Mar ’25UK£3.75
UK£4.03
+7.6%
14.6%UK£5.20UK£2.40n/a18
Feb ’25UK£2.99
UK£3.54
+18.2%
14.8%UK£4.31UK£2.40n/a18
Jan ’25UK£3.00
UK£3.19
+6.2%
26.9%UK£4.31UK£1.00UK£5.7018
Dec ’24UK£2.74
UK£2.84
+3.4%
24.4%UK£4.00UK£1.00UK£5.5817
Nov ’24UK£2.20
UK£2.33
+5.9%
23.6%UK£3.50UK£1.00UK£5.4817
Oct ’24UK£2.21
UK£2.31
+4.5%
23.5%UK£3.50UK£1.00UK£5.2617
Sep ’24UK£2.19
UK£2.29
+4.6%
23.8%UK£3.50UK£1.00UK£4.9817
Aug ’24UK£1.85
UK£1.78
-4.0%
27.4%UK£2.60UK£0.90UK£4.7917
Jul ’24UK£1.51
UK£1.55
+2.4%
28.4%UK£2.55UK£0.90UK£4.5418
Jun ’24UK£1.46
UK£1.54
+6.0%
30.4%UK£2.55UK£0.90UK£4.5316
May ’24UK£1.52
UK£1.51
-0.4%
30.3%UK£2.55UK£0.90UK£4.0915
Apr ’24UK£1.49
UK£1.46
-1.6%
32.8%UK£2.55UK£0.75UK£4.2716
Mar ’24UK£1.48
UK£1.24
-16.3%
24.6%UK£1.75UK£0.75UK£3.7516
Feb ’24UK£1.06
UK£1.04
-2.0%
23.1%UK£1.47UK£0.53UK£2.9915
Jan ’24UK£0.93
UK£0.95
+2.3%
18.2%UK£1.47UK£0.70UK£3.0015

Analyst Forecast: Target price is lower than the current share price.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2025/01/02 08:36
End of Day Share Price 2025/01/02 00:00
Earnings2024/06/30
Annual Earnings2023/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

Rolls-Royce Holdings plc is covered by 50 analysts. 15 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Thomas PicheritAlphaValue
Graham WebsterArden Partners Plc.
Milene KernerBarclays