Why Rolls-Royce Holdings plc (LON:RR.) Could Be Worth Watching

Let's talk about the popular Rolls-Royce Holdings plc (LON:RR.). The company's shares received a lot of attention from a substantial price increase on the LSE over the last few months. The recent jump in the share price has meant that the company is trading at close to its 52-week high. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on Rolls-Royce Holdings’s outlook and valuation to see if the opportunity still exists.

Our free stock report includes 3 warning signs investors should be aware of before investing in Rolls-Royce Holdings. Read for free now.

Is Rolls-Royce Holdings Still Cheap?

Great news for investors – Rolls-Royce Holdings is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is £11.30, but it is currently trading at UK£8.10 on the share market, meaning that there is still an opportunity to buy now. However, given that Rolls-Royce Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

View our latest analysis for Rolls-Royce Holdings

Can we expect growth from Rolls-Royce Holdings?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Rolls-Royce Holdings, it is expected to deliver a relatively unexciting earnings growth of 0.9%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since RR. is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on RR. for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy RR.. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

If you'd like to know more about Rolls-Royce Holdings as a business, it's important to be aware of any risks it's facing. To help with this, we've discovered 3 warning signs (1 is a bit concerning!) that you ought to be aware of before buying any shares in Rolls-Royce Holdings.

If you are no longer interested in Rolls-Royce Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.