Fact based stock research
Rolls-Royce (LSE:RR.)
GB00B63H8491
How to read the free ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Rolls-Royce stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 44 (worse than 56% compared with investment alternatives), Rolls-Royce (Aerospace & Defense, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Rolls-Royce are low in value (priced high) with a consolidated Value Rank of 25 (worse than 75% of alternatives), and are riskily financed (Safety Rank of 18, which means above-average debt burdens) but show above-average growth (Growth Rank of 93). ...read more
RECOMMENDATION: A Combined Rank of 44, is a hold recommendation based on Rolls-Royce's financial characteristics. As the company Rolls-Royce shows low value with an Obermatt Value Rank of 25 (75% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 93% of comparable companies (Obermatt Growth Rank is 93). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 18 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Rolls-Royce, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | United Kingdom |
| Industry | Aerospace & Defense |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Employee Focus EU, SDG 12, SDG 13, SDG 16, SDG 7, SDG 8 |
| Size class | XX-Large |
This stock has achievements: Insight 2019-02-22, Top 10 Stock.
19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Rolls-Royce
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 75 |
|
30 |
|
31 |
|
25 |
|
| GROWTH | ||||||||
| GROWTH | 47 |
|
81 |
|
97 |
|
93 |
|
| SAFETY | ||||||||
| SAFETY | 5 |
|
10 |
|
42 |
|
18 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
27 |
|
65 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
18 |
|
78 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 44 (worse than 56% compared with investment alternatives), Rolls-Royce (Aerospace & Defense, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Rolls-Royce are low in value (priced high) with a consolidated Value Rank of 25 (worse than 75% of alternatives), and are riskily financed (Safety Rank of 18, which means above-average debt burdens) but show above-average growth (Growth Rank of 93). ...read more
RECOMMENDATION: A Combined Rank of 44, is a hold recommendation based on Rolls-Royce's financial characteristics. As the company Rolls-Royce shows low value with an Obermatt Value Rank of 25 (75% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 93% of comparable companies (Obermatt Growth Rank is 93). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 18 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Rolls-Royce, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 75 |
|
30 |
|
31 |
|
25 |
|
| GROWTH | ||||||||
| GROWTH | 47 |
|
81 |
|
97 |
|
93 |
|
| SAFETY | ||||||||
| SAFETY | 5 |
|
10 |
|
42 |
|
18 |
|
| COMBINED | ||||||||
| COMBINED | 21 |
|
32 |
|
70 |
|
44 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 25 (worse than 75% compared with alternatives), Rolls-Royce shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for Rolls-Royce. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 100, which means that the stock price is lower compared with invested capital than for 100% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 6 which means the stock price compared with what market professionals expect for future profits is higher than 94% of comparable companies, indicating a low value concerning Rolls-Royce's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 100 and for the dividend yields rank which is lower than for 78% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 25, is a hold recommendation based on Rolls-Royce's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Rolls-Royce, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 64 |
|
49 |
|
13 |
|
6 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 91 |
|
12 |
|
13 |
|
11 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 96 |
|
100 |
|
100 |
|
100 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
24 |
|
22 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 75 |
|
30 |
|
31 |
|
25 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 93 (better than 93% compared with alternatives) for 2024, Rolls-Royce shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Rolls-Royce. Sales Growth has a value of 64, which means that, currently, professionals expect the company to grow more than 64% of its competitors. The same is valid for Profit Growth with a value of 77 and for Capital Growth with 80. In addition, Stock Returns had an above-average rank value of 97, which means they have been higher than 97% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 93, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Rolls-Royce exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 16 |
|
42 |
|
65 |
|
64 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 1 |
|
66 |
|
98 |
|
77 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
84 |
|
78 |
|
80 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 52 |
|
62 |
|
100 |
|
97 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 47 |
|
81 |
|
97 |
|
93 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 18 (better than 18% compared with alternatives), the company Rolls-Royce has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Rolls-Royce is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Rolls-Royce. Liquidity is at 46, meaning that the company generates less profit to service its debt than 54% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 1, meaning the company has an above-average debt-to-equity ratio. It has more debt than 99% of its competitors. Finally, Refinancing is at a rank of 40 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 60% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 18 (worse than 82% compared with alternatives), Rolls-Royce has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Rolls-Royce because it may suffer significantly in case of future difficulties. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 19 |
|
1 |
|
73 |
|
1 |
|
| REFINANCING | ||||||||
| REFINANCING | 56 |
|
56 |
|
46 |
|
40 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 19 |
|
6 |
|
20 |
|
46 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 5 |
|
10 |
|
42 |
|
18 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
11 |
|
59 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
46 |
|
45 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
67 |
|
79 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
38 |
|
38 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
27 |
|
65 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Rolls-Royce from December 19, 2024.
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