Download PDF

1. Company Snapshot

1.a. Company Description

Rolls-Royce Holdings plc operates as an industrial technology company in the United Kingdom and internationally.The company operates in four segments: Civil Aerospace, Power Systems, Defence, and New Markets.The Civil Aerospace segment develops, manufactures, and sells aero engines for large commercial aircraft, regional jet, and business aviation markets, as well as provides aftermarket services.


The Power Systems segment engages in the development, manufacture, marketing, and sale of integrated solutions for onsite power and propulsion for the marine, defense, power generation, and industrial markets.The Defence segment offers aero engines for military transport and patrol aircraft applications; and naval engines and submarine nuclear power plants, as well as aftermarket services.The New Markets segment develops, manufactures, and sells small modular reactor and new electrical power solutions.


It also provides maintenance, repair, and overhaul services.Rolls-Royce Holdings plc was founded in 1884 and is headquartered in London, the United Kingdom.

Show Full description

1.b. Last Insights on RR

Rolls-Royce Holdings plc's recent performance was driven by a strong first-half profit jump, fueled by gains in its civil aerospace, defense, and energy divisions. The company's large engine aftermarket business, which includes maintenance, repairs, and upgrades, drove profitability in its civil aerospace unit. Additionally, Rolls-Royce's cost-efficiency actions helped mitigate the effect of inflation. The company raised its guidance on continued strong demand, particularly from data-center and government customers. A $75M boost to expand US output for MTU Series400 engine also contributed to growth.

1.c. Company Highlights

2. Transcript Summary

Unfortunately this company is not part of our coverage yet. But as part of your subscription plan you can request it by clicking just below and we'll process.

Request Coverage

3. NewsRoom

Card image cap

Most popular stocks and funds investors bought in November

Dec -04

Source:

Card image cap

Why Oklo Stock Dropped Again Today

Dec -01

Source:

Card image cap

Xanadu, Rolls-Royce, and Riverlane unlock dramatic improvements for applications to jet engine airflow simulations using quantum computing

Nov -25

Source:

Card image cap

UK Greenlights First Rolls-Royce SMR Project Despite U.S. Pushback

Nov -22

Source:

Card image cap

Bentley abandons plans to build only EVs by 2035

Nov -19

Source:

Card image cap

Is Rolls-Royce a Good Value After Its 90% Rally and Sustainable Aviation Push?

Nov -14

Source:

Card image cap

Miliband makes ‘no apologies’ after US criticism of Welsh nuclear plant plan

Nov -13

Source:

Card image cap

Rolls-Royce Backs Outlook on Strong Demand for Engines, Power Generation

Nov -13

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.10%)

6. Segments

Civil Aerospace

Expected Growth: 10.5%

The civil aerospace segment is expected to grow above the global average due to increasing demand for air travel and the need for more efficient engines, driving the demand for new engines and aftermarket services. This growth is supported by the ongoing recovery in air travel demand post-pandemic.

Defence

Expected Growth: 8.0%

The defence segment is expected to grow, albeit at a slower rate than the civil aerospace segment, due to the stable demand driven by government defense budgets. However, the growth might be constrained by budgetary constraints in some countries.

Power Systems

Expected Growth: 9.5%

The power systems segment is expected to grow in line with the global average, driven by the demand for efficient and reliable power generation and propulsion systems across various sectors, including marine and power generation.

New Markets

Expected Growth: 15.0%

The new markets segment is expected to grow significantly above the global average, driven by investments in emerging technologies and the potential for high returns from successful innovations.

Unallocated Underlying Adjustments and Adjustments to Foreign Exchange

Expected Growth: None%

None

Other Businesses

Expected Growth: 9.1%

The other businesses segment, including ITP Aero, is expected to grow in line with the global average, driven by the demand for aero-engine components and repair services, which are closely tied to the overall aerospace industry performance.

7. Detailed Products

Civil Aerospace

Designs, develops and manufactures aero engines for commercial aircraft, including wide-body and narrow-body engines

Defence Aerospace

Designs, develops and manufactures aero engines for military aircraft, including fighter jets and transport planes

Power Systems

Designs, develops and manufactures high-speed reciprocating engines, propulsion systems and distributed energy systems

Marine

Designs, develops and manufactures propulsion systems, including azipods and thrusters, for commercial and naval vessels

Nuclear

Designs, develops and manufactures nuclear reactors and nuclear instrumentation and control systems

Digital

Provides digital solutions, including data analytics and artificial intelligence, for the aerospace, defence and industrial sectors

8. Rolls-Royce Holdings plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Rolls-Royce Holdings plc faces moderate threat from substitutes, as customers have limited alternatives for its high-end aerospace and defense products.

Bargaining Power Of Customers

Rolls-Royce Holdings plc has a diverse customer base, including governments and corporations, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Rolls-Royce Holdings plc relies on a network of suppliers for components and materials, but has some bargaining power due to its large scale and long-term contracts.

Threat Of New Entrants

The aerospace and defense industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to compete with Rolls-Royce Holdings plc.

Intensity Of Rivalry

The aerospace and defense industry is highly competitive, with several established players, including General Electric, Pratt & Whitney, and Safran, competing with Rolls-Royce Holdings plc for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 277.14%
Debt Cost 6.47%
Equity Weight -177.14%
Equity Cost 12.76%
WACC -4.67%
Leverage -156.45%

11. Quality Control: Rolls-Royce Holdings plc passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
BAE Systems

A-Score: 5.7/10

Value: 2.4

Growth: 6.9

Quality: 4.8

Yield: 4.4

Momentum: 9.5

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Safran

A-Score: 5.0/10

Value: 1.1

Growth: 4.1

Quality: 7.2

Yield: 0.6

Momentum: 8.5

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
Airbus

A-Score: 5.0/10

Value: 1.7

Growth: 5.6

Quality: 5.2

Yield: 1.2

Momentum: 8.5

Volatility: 7.7

1-Year Total Return ->

View Full Report
Stock-Card
Thales

A-Score: 4.9/10

Value: 2.0

Growth: 5.0

Quality: 4.2

Yield: 3.1

Momentum: 10.0

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
Rheinmetall

A-Score: 4.9/10

Value: 0.2

Growth: 8.6

Quality: 6.3

Yield: 2.5

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

View Full Report
Stock-Card
Rolls-Royce

A-Score: 4.8/10

Value: 1.9

Growth: 6.4

Quality: 6.6

Yield: 0.6

Momentum: 9.5

Volatility: 3.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.85$

Current Price

10.85$

Potential

0.00%

Expected Cash-Flows