LSE:RR.

Stock Analysis Report

Executive Summary

Rolls-Royce Holdings plc operates as an industrial technology company worldwide.


Snowflake Analysis

Reasonable growth potential and slightly overvalued.


Similar Companies

Share Price & News

How has Rolls-Royce Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RR. has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.0%

RR.

-2.1%

GB Aerospace & Defense

-3.0%

GB Market


1 Year Return

-25.3%

RR.

31.2%

GB Aerospace & Defense

11.0%

GB Market

Return vs Industry: RR. underperformed the UK Aerospace & Defense industry which returned 28.7% over the past year.

Return vs Market: RR. underperformed the UK Market which returned 12.7% over the past year.


Shareholder returns

RR.IndustryMarket
7 Day-2.0%-2.1%-3.0%
30 Day-7.2%5.9%-2.4%
90 Day-8.6%10.9%3.9%
1 Year-24.2%-25.3%35.8%31.2%16.8%11.0%
3 Year1.7%-2.5%32.3%18.5%20.0%4.7%
5 Year-20.7%-27.2%34.8%7.1%38.9%6.8%

Price Volatility Vs. Market

How volatile is Rolls-Royce Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Rolls-Royce Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RR. (£6.74) is trading below our estimate of fair value (£21.23)

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


Price To Earnings Ratio

PE vs Industry: RR. is unprofitable, so we can't compare its PE Ratio to the Aerospace & Defense industry average.

PE vs Market: RR. is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RR.'s PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RR. has negative assets, so we can't compare its PB Ratio to the GB Aerospace & Defense industry average.


Next Steps

Future Growth

How is Rolls-Royce Holdings forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

54.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RR. is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.5%).

Earnings vs Market: RR. is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: RR.'s is expected to become profitable in the next 3 years.

Revenue vs Market: RR.'s revenue (3.4% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: RR.'s revenue (3.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RR.'s Return on Equity is forecast to be very high in 3 years time (102.6%).


Next Steps

Past Performance

How has Rolls-Royce Holdings performed over the past 5 years?

-14.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RR. is currently unprofitable.

Growing Profit Margin: RR. is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: RR. is unprofitable, and losses have increased over the past 5 years at a rate of -14.3% per year.

Accelerating Growth: Unable to compare RR.'s earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: RR. is unprofitable, making it difficult to compare its past year earnings growth to the Aerospace & Defense industry (-13.2%).


Return on Equity

High ROE: RR.'s liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Rolls-Royce Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: RR. has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: RR. has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: RR. has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: RR.'s has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet

Inventory Level: RR. has a high level of physical assets or inventory.

Debt Coverage by Assets: RR. has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable RR. has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: RR. is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 36.4% per year.


Next Steps

Dividend

What is Rolls-Royce Holdings's current dividend yield, its reliability and sustainability?

1.80%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%1.9%markettop25%5.1%industryaverage2.8%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: RR.'s dividend (1.8%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.86%).

High Dividend: RR.'s dividend (1.74%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: RR.'s dividend payments have been volatile in the past 10 years.

Growing Dividend: RR.'s dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: RR. is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: RR.'s dividends in 3 years are forecast to be well covered by earnings (41.9% payout ratio).


Next Steps

Management

What is the CEO of Rolls-Royce Holdings's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average management tenure


CEO

Warren East (57yo)

4.5yrs

Tenure

UK£3,943,000

Compensation

Mr. D. Warren A. East, CBE, has been the Chief Executive Officer of Rolls-Royce Holdings plc since July 1, 2015. Mr. East served as the Chief Executive Officer of ARM Holdings Plc and ARM Ltd. from October ...


CEO Compensation Analysis

Compensation vs Market: D. Warren's total compensation ($USD5.13M) is about average for companies of similar size in the UK market ($USD4.48M).

Compensation vs Earnings: D. Warren's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

3.8yrs

Average Tenure

Experienced Management: RR.'s management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

5.3yrs

Average Tenure

64.5yo

Average Age

Experienced Board: RR.'s board of directors are considered experienced (5.3 years average tenure).


Insider Trading

Insider Buying: RR. insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£98207 Jan 20
Hsien Yang Lee
EntityIndividual
Shares146
Max PriceUK£6.72
BuyUK£1,97707 Jan 20
Ian Edward Davis
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares294
Max PriceUK£6.72
BuyUK£1,94009 Dec 19
Linda Cairnie
EntityIndividual
Shares271
Max PriceUK£7.16
BuyUK£98109 Dec 19
Hsien Yang Lee
EntityIndividual
Shares137
Max PriceUK£7.16
BuyUK£1,97609 Dec 19
Ian Edward Davis
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares276
Max PriceUK£7.16
BuyUK£1,94207 Nov 19
Linda Cairnie
EntityIndividual
Shares254
Max PriceUK£7.64
BuyUK£98607 Nov 19
Hsien Yang Lee
EntityIndividual
Shares129
Max PriceUK£7.64
BuyUK£1,98007 Nov 19
Ian Edward Davis
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares259
Max PriceUK£7.64
BuyUK£1,94107 Oct 19
Linda Cairnie
EntityIndividual
Shares266
Max PriceUK£7.30
BuyUK£98507 Oct 19
Hsien Yang Lee
EntityIndividual
Shares135
Max PriceUK£7.30
BuyUK£1,97807 Oct 19
Ian Edward Davis
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares271
Max PriceUK£7.30
BuyUK£15,39605 Sep 19
Irene Dorner
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares2,000
Max PriceUK£7.70
BuyUK£75,81129 Aug 19
Lewis W. Booth
EntityIndividual
Role
Member of the Board of Directors
Independent Non Executive Director
Shares10,000
Max PriceUK£7.60
BuyUK£39,15009 Aug 19
Beverly Goulet
EntityIndividual
Shares5,000
Max PriceUK£7.83
BuyUK£109,03107 Aug 19
Ian Edward Davis
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares15,000
Max PriceUK£7.27
BuyUK£99,78207 Aug 19
D. Warren East
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares13,598
Max PriceUK£7.34
BuyUK£98407 Aug 19
Hsien Yang Lee
EntityIndividual
Shares130
Max PriceUK£7.57
BuyUK£1,97607 Aug 19
Ian Edward Davis
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares261
Max PriceUK£7.57
BuyUK£1,93807 Aug 19
Linda Cairnie
EntityIndividual
Shares256
Max PriceUK£7.57
BuyUK£1,97809 Jul 19
Ian Edward Davis
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares229
Max PriceUK£8.64
BuyUK£98409 Jul 19
Hsien Yang Lee
EntityIndividual
Shares114
Max PriceUK£8.64
BuyUK£1,94309 Jul 19
Linda Cairnie
EntityIndividual
Shares225
Max PriceUK£8.64
BuyUK£1,93910 Jun 19
Linda Cairnie
EntityIndividual
Shares213
Max PriceUK£9.10
BuyUK£98310 Jun 19
Hsien Yang Lee
EntityIndividual
Shares108
Max PriceUK£9.10
BuyUK£1,97610 Jun 19
Ian Edward Davis
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares217
Max PriceUK£9.10
BuyUK£98607 May 19
Hsien Yang Lee
EntityIndividual
Shares107
Max PriceUK£9.22
BuyUK£1,98107 May 19
Ian Edward Davis
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares215
Max PriceUK£9.22
BuyUK£1,93507 May 19
Linda Cairnie
EntityIndividual
Shares210
Max PriceUK£9.22
BuyUK£1,93708 Apr 19
Linda Cairnie
EntityIndividual
Shares211
Max PriceUK£9.18
BuyUK£98208 Apr 19
Hsien Yang Lee
EntityIndividual
Shares107
Max PriceUK£9.18
BuyUK£1,98208 Apr 19
Ian Edward Davis
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares216
Max PriceUK£9.18
BuyUK£1,93807 Mar 19
Linda Cairnie
EntityIndividual
Shares216
Max PriceUK£8.97
BuyUK£98707 Mar 19
Hsien Yang Lee
EntityIndividual
Shares110
Max PriceUK£8.97
BuyUK£1,98307 Mar 19
Ian Edward Davis
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares221
Max PriceUK£8.97
BuyUK£1,93708 Feb 19
Linda Cairnie
EntityIndividual
Shares213
Max PriceUK£9.09
BuyUK£98208 Feb 19
Hsien Yang Lee
EntityIndividual
Shares108
Max PriceUK£9.09
BuyUK£1,98208 Feb 19
Ian Edward Davis
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares218
Max PriceUK£9.09

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.1%.


Management Team

  • Ed Pease

    Senior Vice President of America

    • Tenure: 18.8yrs
  • Warren East (57yo)

    CEO & Executive Director

    • Tenure: 4.5yrs
    • Compensation: UK£3.94m
  • Ian Lawson

    Chief Medical Officer

    • Ben Story

      Strategic Marketing Director

      • Tenure: 3.3yrs
    • Stephen Daintith (54yo)

      CFO & Executive Director

      • Tenure: 2.8yrs
      • Compensation: UK£3.10m
    • Paul Stein

      Chief Technology Officer

      • Tenure: 2.8yrs
    • Richard Wray

      Director of External Communications & Brand

      • Tenure: 6.3yrs
    • Harry Holt

      Chief People Officer

      • Tenure: 2yrs
    • Mark Gregory

      General Counsel

      • Tenure: 4.3yrs
    • Jennifer Ramsey

      Head of Investor Relations


      Board Members

      • Charles Powell (78yo)

        Chairman of International Advisory Board

        • Warren East (57yo)

          CEO & Executive Director

          • Tenure: 4.5yrs
          • Compensation: UK£3.94m
        • Lewis W. Booth (70yo)

          Independent Non Executive Director

          • Tenure: 8.7yrs
          • Compensation: UK£124.00k
        • Ratan Tata (82yo)

          Member of International Advisory Board

          • Lubna Al-Olayan (63yo)

            Member of International Advisory Board

            • Ian Edward Davis (68yo)

              Independent Chairman

              • Tenure: 6.7yrs
              • Compensation: UK£427.00k
            • Kevin Smith (64yo)

              Senior Independent Director

              • Tenure: 3.7yrs
              • Compensation: UK£107.00k
            • Irene Dorner (65yo)

              Independent Non-Executive Director

              • Tenure: 4.5yrs
              • Compensation: UK£77.00k
            • Stephen Daintith (54yo)

              CFO & Executive Director

              • Tenure: 2.8yrs
              • Compensation: UK£3.10m
            • Gang Fan (64yo)

              Member of International Advisory Board

              Company Information

              Rolls-Royce Holdings plc's company bio, employee growth, exchange listings and data sources


              Key Information

              • Name: Rolls-Royce Holdings plc
              • Ticker: RR.
              • Exchange: LSE
              • Founded: 1884
              • Industry: Aerospace and Defense
              • Sector: Capital Goods
              • Market Cap: UK£12.531b
              • Shares outstanding: 1.92b
              • Website: https://www.rolls-royce.com

              Number of Employees


              Location

              • Rolls-Royce Holdings plc
              • Kings Place
              • 90 York Way
              • London
              • Greater London
              • N1 9FX
              • United Kingdom

              Listings

              TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
              RYCE.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDDec 1990
              RRU1DB (Deutsche Boerse AG)SPONSORED ADRDEEURDec 1990
              RYCE.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
              RR.LSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
              RRUDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
              RRLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
              RR NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJan 1992
              RLLC.FOTCPK (Pink Sheets LLC)NON CUM RED PREF SHS GBP0.001 CUSUSDNov 2016

              Biography

              Rolls-Royce Holdings plc operates as an industrial technology company worldwide. It operates through four segments: Civil Aerospace, Power Systems, Defence, and ITP Aero. The Civil Aerospace segment manufactures aero engines for large commercial aircraft, regional jet, and business aviation markets, as well as provides aftermarket services. The Power Systems segment provides high-speed and medium-speed reciprocating engines, and propulsion systems for marine, defense, power generation, and industrial markets. It also engages in civil nuclear operations that supply safety-critical systems to nuclear power plants. The Defence segment offers aero engines for military transport and patrol aircraft applications; and naval engines and submarines, as well as aftermarket services. The ITP Aero segment is involved in the design, research and development, manufacture and casting, and assembly and testing of aeronautical engines and gas turbines. It also provides maintenance, repair, and overhaul services for regional airlines and helicopters, as well as business aviation, and industrial and defense applications. Rolls-Royce Holdings plc was founded in 1884 and is headquartered in London, the United Kingdom. 


              Company Analysis and Financial Data Status

              All financial data provided by Standard & Poor's Capital IQ.
              DataLast Updated (UTC time)
              Company Analysis2020/01/28 20:38
              End of Day Share Price2020/01/28 00:00
              Earnings2019/06/30
              Annual Earnings2018/12/31


              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.