Rolls Royce Share Price Forecast

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Rolls Royce Share Price Forecast

Has Rolls Royce'S Share Price Hit A Roadblock?

The share price of Rolls-Royce (RR) has gone from just 98p to around 9.38, within a span of 5 years. In other words, that's a gain of almost 859%, leaving other stocks in the FTSE 100 far behind.

According to experts, this gain can be attributed to the end of the COVID era. But the current price of Rolls Royce shares is already more than 100% higher than the 2019-era.

Rolls-Royce Revenue Up By 65%

Since 2020, the total revenues of Rolls-Royce have also increased by 65%, a big number for a car manufacturer. But even these numbers aren't enough to justify the 850% gains in the stock.

In the meantime, the P/S multiple of the Rolls-Royce has moved from under 1 during 2020 to almost 4.22! To put it into perspective, that's a jump of almost 322%.

According to the analyst, the revenues of Rolls-Royce are expected to reach 23.5 billion by the year 2028. But if we compare that with the market value of RR, that means a P/S multiple of 3.5. Once again, that's an unusually high number for the Rolls Royce.

In addition, the fixed costs of the Rolls-Royce are also very high, leading to wider earnings and margins. So, even a small decline in sales can have major impacts on the profits.

Looking ahead, experts believe that the EPS of Rolls-Royce will touch 36p in the year 2028. However, experts don't expect a major increase in the Rolls-Royce price.

In fact, the forecast for the Rolls-Royce share price is almost similar to the firm's current trading price.

To put it short, you shouldn't expect the Rolls-Royce to replicate the same performance it showed during the last 5 years. In fact, it's better to look at other stock options in the FTSE 100 and the S&P 500 rather than Rolls-Royce.

To conclude, the Rolls-Royce share price appears to be stalling and has hit a roadblock.

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