Rolls-Royce Holdings Valuation
Is RRL undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
5/6Valuation Score 5/6
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 (£5.46) is trading below our estimate of fair value (£11.21)
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.
| What is RRL's PE Ratio? | |
|---|---|
| PE Ratio | 19.8x |
| Earnings | UK£2.33b |
| Market Cap | UK£46.11b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 2.6x |
| Enterprise Value/EBITDA | 18.6x |
| PEG Ratio | -226.2x |
Price to Earnings Ratio vs Peers
How does RRL's PE Ratio compare to its peers?
| Company | Forward PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 21.1x | ||
BA. BAE Systems | 21.7x | 7.7% | UK£39.9b |
QQ. QinetiQ Group | 17.5x | 13.9% | UK£2.4b |
BAB Babcock International Group | 13.8x | 14.2% | UK£2.6b |
CHG Chemring Group | 31.6x | 22.2% | UK£981.5m |
RRL Rolls-Royce Holdings | 19.8x | -0.09% | UK£46.1b |
Price-To-Earnings vs Peers: RRL is good value based on its Price-To-Earnings Ratio (19.8x) compared to the peer average (21.1x).
Price to Earnings Ratio vs Industry
How does RRL's PE Ratio compare vs other companies in the European Aerospace & Defense Industry?
| 0 Companies | Price / Earnings | Estimated Growth | Market Cap |
|---|---|---|---|
| 0 Companies | Estimated Growth | Market Cap |
|---|
Price-To-Earnings vs Industry: RRL 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 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.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 19.8x |
| Fair PE Ratio | 22.5x |
Price-To-Earnings vs Fair Ratio: RRL is good value based on its Price-To-Earnings Ratio (19.8x) compared to the estimated Fair Price-To-Earnings Ratio (22.5x).
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
| Date | Share Price | Average 1Y Price Target | Dispersion | High | Low | 1Y Actual price | Analysts |
|---|---|---|---|---|---|---|---|
| Current | UK£5.46 | UK£5.47 +0.1% | 21.5% | UK£7.01 | UK£2.40 | n/a | 17 |
| Nov ’25 | UK£5.48 | UK£5.35 -2.3% | 20.4% | UK£6.65 | UK£2.40 | n/a | 17 |
| Oct ’25 | UK£5.26 | UK£5.35 +1.7% | 20.5% | UK£6.75 | UK£2.40 | n/a | 17 |
| Sep ’25 | UK£4.98 | UK£5.35 +7.5% | 20.5% | UK£6.75 | UK£2.40 | n/a | 17 |
| Aug ’25 | UK£4.79 | UK£4.82 +0.6% | 19.5% | UK£6.00 | UK£2.40 | n/a | 17 |
| Jul ’25 | UK£4.54 | UK£4.76 +4.9% | 19.7% | UK£6.00 | UK£2.40 | n/a | 17 |
| Jun ’25 | UK£4.53 | UK£4.48 -1.1% | 18.4% | UK£6.00 | UK£2.40 | n/a | 17 |
| May ’25 | UK£4.09 | UK£4.44 +8.4% | 17.0% | UK£5.50 | UK£2.40 | n/a | 17 |
| Apr ’25 | UK£4.27 | UK£4.40 +2.9% | 16.6% | UK£5.50 | UK£2.40 | n/a | 17 |
| Mar ’25 | UK£3.75 | UK£4.03 +7.6% | 14.6% | UK£5.20 | UK£2.40 | n/a | 18 |
| Feb ’25 | UK£2.99 | UK£3.54 +18.2% | 14.8% | UK£4.31 | UK£2.40 | n/a | 18 |
| Jan ’25 | UK£3.00 | UK£3.19 +6.2% | 26.9% | UK£4.31 | UK£1.00 | n/a | 18 |
| Dec ’24 | UK£2.74 | UK£2.84 +3.4% | 24.4% | UK£4.00 | UK£1.00 | n/a | 17 |
| Nov ’24 | UK£2.20 | UK£2.33 +5.9% | 23.6% | UK£3.50 | UK£1.00 | UK£5.48 | 17 |
| Oct ’24 | UK£2.21 | UK£2.31 +4.5% | 23.5% | UK£3.50 | UK£1.00 | UK£5.26 | 17 |
| Sep ’24 | UK£2.19 | UK£2.29 +4.6% | 23.8% | UK£3.50 | UK£1.00 | UK£4.98 | 17 |
| Aug ’24 | UK£1.85 | UK£1.78 -4.0% | 27.4% | UK£2.60 | UK£0.90 | UK£4.79 | 17 |
| Jul ’24 | UK£1.51 | UK£1.55 +2.4% | 28.4% | UK£2.55 | UK£0.90 | UK£4.54 | 18 |
| Jun ’24 | UK£1.46 | UK£1.54 +6.0% | 30.4% | UK£2.55 | UK£0.90 | UK£4.53 | 16 |
| May ’24 | UK£1.52 | UK£1.51 -0.4% | 30.3% | UK£2.55 | UK£0.90 | UK£4.09 | 15 |
| Apr ’24 | UK£1.49 | UK£1.46 -1.6% | 32.8% | UK£2.55 | UK£0.75 | UK£4.27 | 16 |
| Mar ’24 | UK£1.48 | UK£1.24 -16.3% | 24.6% | UK£1.75 | UK£0.75 | UK£3.75 | 16 |
| Feb ’24 | UK£1.06 | UK£1.04 -2.0% | 23.1% | UK£1.47 | UK£0.53 | UK£2.99 | 15 |
| Jan ’24 | UK£0.93 | UK£0.95 +2.3% | 18.2% | UK£1.47 | UK£0.70 | UK£3.00 | 15 |
| Dec ’23 | UK£0.87 | UK£0.94 +8.2% | 19.5% | UK£1.47 | UK£0.60 | UK£2.74 | 15 |
| Nov ’23 | UK£0.81 | UK£0.93 +14.0% | 20.5% | UK£1.47 | UK£0.60 | UK£2.20 | 14 |
Analyst Forecast: Target price is less than 20% higher than the current share price.
Discover undervalued companies
Renold
UK£95.0m
Engages in the manufacture and sale of high precision engineered products and solutions in the United Kingdom, rest of Europe, the United States, Canada, Australasia, China, India, and internationally.
RNO
UK£0.48
7D
-12.1%
1Y
48.6%
Rieter Holding
CHF 390.3m
Supplies systems for manufacturing yarn from staple fibers in spinning mills in Switzerland and internationally.
0QKA
CHF 87.30
7D
-3.5%
1Y
0.3%
Eiffage
€8.1b
Engages in the construction, property development, urban development, civil engineering, metallic construction, roads, energy systems, and concessions businesses in France and internationally.
0NPT
€84.59
7D
-2.0%
1Y
-7.5%