Latest news with #Rolls-RoyceHoldings
Business Times
01-06-2025
- Business
- Business Times
Emirates will keep A380 jumbo flying until end of next Decade
[DUBAI] Emirates plans to keep its giant fleet of Airbus SE A380 double-deckers in operation until the end of next decade, as the world's largest international airline seeks to extend the lifespan of an aircraft that helped lay the foundation for its dominance on global routes. The Dubai-based carrier will introduce one more upgrade to the aircraft's first-class cabins before retiring the planes at the end of next decade, Emirates President Tim Clark told journalists at an aviation gathering in New Delhi on Sunday (Jun 1). Emirates is already pouring billions into a refresh of its fleet of A380s as it seeks to extend the jumbo jets' lifespan. Airbus announced early in 2019 that it would cease making the plane because of slim orders, with only Emirates buying the giant plane in large quantities, with a fleet of more than 100 units. Many other carriers have retired their fleets, and switched to smaller variants like the Airbus A350-1000 or the Boeing Co 777. Clark is pushing the lifespan of the planes because Emirates lacks an obvious replacement at this stage. The airline hasn't ordered the A350-1000 because Clark has been openly critical of the durability of the aircraft's engines, made by Rolls-Royce Holdings. And the Boeing 777X model won't arrive before sometime next year, he said. Boeing is providing 'clearer messages' on its delivery programme for the 777X, the next iteration of its popular widebody aircraft, Clark said, with an entry into service in global fleets possibly toward the fall of next year. The refreshed A380s come with a four-class layout consisting of first, business, premium economy and economy class. Emirates equipped its original first class with extras like enclosed cabins and even showers, while business-class passengers can mingle at a communal bar on the upper deck. While the A380 is a hit with the flying public because of its imposing size and often luxurious layout, airlines struggled to make it operationally viable given the high fuel costs and complexity to operate a plane of that size on many routes. BLOOMBERG
Business Insider
24-05-2025
- Business
- Business Insider
Kepler Capital Reaffirms Their Hold Rating on QinetiQ (QQ)
Kepler Capital analyst Aymeric Poulain maintained a Hold rating on QinetiQ (QQ – Research Report) on May 22 and set a price target of p436.00. The company's shares closed yesterday at p466.20. Confident Investing Starts Here: Poulain covers the Industrials sector, focusing on stocks such as Airbus Group SE, Rolls-Royce Holdings, and BAE Systems. According to TipRanks, Poulain has an average return of 14.1% and a 66.11% success rate on recommended stocks. The word on The Street in general, suggests a Moderate Buy analyst consensus rating for QinetiQ with a p475.86 average price target, a 2.07% upside from current levels. In a report released yesterday, RBC Capital also maintained a Hold rating on the stock with a £4.70 price target.
Yahoo
26-04-2025
- Business
- Yahoo
I reckon a bull market's coming! Here's what I'm buying for my Stocks and Shares ISA
I've just bought a few more Rolls-Royce Holdings (LSE:RR.) shares using my Stocks and Shares ISA. I'm hoping that the aerospace and defence group will benefit from improved earnings, as well as investors taking more of an interest in UK shares in general. In my opinion, the London Stock Exchange is undervalued compared to its peers, and could benefit from the current turbulence in the United States. President Trump's erratic policies are causing mayhem and are in danger of tipping the country into recession. JP Morgan claims there's a 60% chance this will happen in 2025. This suggests the White House's current fixation with tariffs might have some unintended consequences. Since 1950, the United States has experienced 10 recessions. It used to be said that when America sneezes, the rest of the world catches a cold. But we live in different times now. President Trump's isolationist policies have caused the dollar to fall and a sell-off in US government bonds. Although the FTSE 100's been affected by the uncertainty surrounding the announcements on 'Liberation Day', it's down far less than the S&P500. Investors appear to be losing confidence in America and could turn elsewhere And if the 'rising tide lifts all boats' mantra proves correct, Rolls-Royce shares should also benefit. This is one of the reasons why I recently took advantage of the pullback in its share price — the stock's currently 8% below its 52-week high. And I'm not alone. Of the 17 brokers covering the stock, 12 rate it a Buy, four are Neutral and one is advising its clients to Sell. Over the next three financial years, the consensus forecast is for underlying earnings per share of 23.56p (2025), 27.72p (2026) and 30.96p (2027). If realised, the 2027 figure would be 50% higher than the amount reported for 2024 (20.29p). At the moment, the company's valued at around 36.9 times historic earnings. If this continued, the stock could be changing hands for 1,142p when its 2027 results are finalised. That would be a 52% premium to today's price. I'm not claiming the company's shares are cheap. But it's able to justify this above-average valuation because it continues to grow and exceed expectations. On 27 February, the group upgraded its 'mid-term' (2028) targets for underlying operating profit to £3.6bn-£3.9bn. For comparison, this was £2.5bn in 2025. Much of this growth's expected to come from additional defence spending and increased engine flying hours. And looking further ahead, the group's also likely to benefit from the adoption of mini nuclear power stations (small modular reactors) that it's at the forefront of developing. But the group still faces some challenges. During the pandemic, we saw how its financial performance was severely impacted by flight restrictions. Although this was probably a once-in-a-generation event, it does show how dependent the group is on the aviation industry. And because of its healthy valuation, if the group's results fail to live up to expectations, there could be a significant market correction. However, after weighing up these pros and cons, I've decided to add more of the stock to my Stocks and Shares ISA. Other growth investors could consider doing the same. The post I reckon a bull market's coming! Here's what I'm buying for my Stocks and Shares ISA appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool JPMorgan Chase is an advertising partner of Motley Fool Money. James Beard has positions in Rolls-Royce Plc. The Motley Fool UK has recommended Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
Yahoo
21-04-2025
- Business
- Yahoo
With the Rolls-Royce share price still down 10%, can I resist buying?
The Rolls-Royce Holdings (RR.L) share price has regained some of its recently-lost ground, after dipping below 600p in early April. That pushed it down to levels we hadn't seen since before February's full-year results sent it flying high. Not long ago I was wondering how soon Rolls-Royce shares might make it through the £10 barrier. There's actually nothing special about that price really. But markets do seem to like round decimal numbers. Recently though, I've been wondering if it can hold on to £7-ish levels. Even around 730p, the shares are still more than 10% down from their high point this year. Is this another of those buying opportunities that I keep thinking I'm waiting for? The speed with which investors bought back into Rolls-Royce shares when it sounded like noises from the White House might have been softening says one thing to me. Confidence remains strong. The market seems to think a global trade war might not be so bad for the company after all. But is that confidence misplaced? Aircraft construction strikes me as one of the worst potential casualties of trade protectionism. It's got to be among the most widely globalised industries. Look at Boeing (BA), for example. Final assembly is in US plants, but the parts come from Japan, South Korea, the UK, Germany, Italy, France, Australia, Sweden… and China. Dozens of global companies provide parts and assemblies. And China contributes parts to every single commercial model that Boeing currently makes. Boeing shares have recovered some of the hammering they took in the immediate aftermath of tariff day. But to assume no real impact on Boeing and on the whole aircraft construction business could be a big mistake. Rolls-Royce has its annual general meeting (AGM) on 1 May. Those can be dreary affairs, with nothing more than a formulaic roll-out of statistics, votes and the like. But I wonder if the board might have a few words to offer at this one, on how they see the global trade threat unfolding? CEO Tufan Erginbilgiç isn't shy when it comes to saying what he thinks, and I'd really like to hear him at this event. At FY results time he was strongly upbeat, speaking of a 'high-performing, competitive, resilient, and growing business'. And the numbers backed him up. But he did allude to 'a supply chain environment that remains challenging'. And global supply chains aren't going to be made easier by recent events. Forecasts put the shares on a price-to-earnings (P/E) ratio of 28.5 for the end of this year, dropping to 23.3 by 2027. That doesn't look too high for a company with growth prospects. But projected earnings per share (EPS) growth is relatively slow, with a 2% rise between 2024 and 2027 as there's a dip on the cards this year. I like today's lower share price. But I don't like the greater uncertainty we now face. Rolls-Royce doesn't fit my risk profile, so yes, I can resist it. But I still think growth investors who don't mind a bit of risk could do well to consider it now. The post With the Rolls-Royce share price still down 10%, can I resist buying? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
Yahoo
21-04-2025
- Business
- Yahoo
Are Investors Undervaluing Rolls-Royce Holdings plc (LON:RR.) By 46%?
The projected fair value for Rolls-Royce Holdings is UK£13.26 based on 2 Stage Free Cash Flow to Equity Rolls-Royce Holdings' UK£7.14 share price signals that it might be 46% undervalued Our fair value estimate is 65% higher than Rolls-Royce Holdings' analyst price target of UK£8.03 Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Rolls-Royce Holdings plc (LON:RR.) as an investment opportunity by taking the expected future cash flows and discounting them to today's value. This will be done using the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex. We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. Our free stock report includes 3 warning signs investors should be aware of before investing in Rolls-Royce Holdings. Read for free now. We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (£, Millions) UK£2.87b UK£3.13b UK£3.55b UK£4.25b UK£4.68b UK£5.03b UK£5.34b UK£5.60b UK£5.83b UK£6.04b Growth Rate Estimate Source Analyst x7 Analyst x9 Analyst x8 Analyst x5 Est @ 9.97% Est @ 7.67% Est @ 6.06% Est @ 4.93% Est @ 4.14% Est @ 3.59% Present Value (£, Millions) Discounted @ 6.5% UK£2.7k UK£2.8k UK£2.9k UK£3.3k UK£3.4k UK£3.5k UK£3.4k UK£3.4k UK£3.3k UK£3.2k ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = UK£32b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.3%. We discount the terminal cash flows to today's value at a cost of equity of 6.5%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = UK£6.0b× (1 + 2.3%) ÷ (6.5%– 2.3%) = UK£148b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= UK£148b÷ ( 1 + 6.5%)10= UK£79b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is UK£111b. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of UK£7.1, the company appears quite undervalued at a 46% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Rolls-Royce Holdings as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.5%, which is based on a levered beta of 0.814. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Rolls-Royce Holdings Strength Debt is well covered by earnings and cashflows. Weakness Earnings growth over the past year underperformed the Aerospace & Defense industry. Dividend is low compared to the top 25% of dividend payers in the Aerospace & Defense market. Opportunity Annual revenue is forecast to grow faster than the British market. Trading below our estimate of fair value by more than 20%. Threat Total liabilities exceed total assets, which raises the risk of financial distress. Annual earnings are forecast to grow slower than the British market. Whilst important, the DCF calculation ideally won't be the sole piece of analysis you scrutinize for a company. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. What is the reason for the share price sitting below the intrinsic value? For Rolls-Royce Holdings, we've compiled three further aspects you should assess: Risks: Case in point, we've spotted 3 warning signs for Rolls-Royce Holdings you should be aware of, and 1 of them is a bit concerning. Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for RR.'s future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. Simply Wall St updates its DCF calculation for every British stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Sign in to access your portfolio
