How high can the Rolls-Royce share price go? Let’s ask the experts

What do analysts’ forecasts say about the outlook for the Rolls-Royce share price? Right now, price targets cover a very wide range.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Businesswoman analyses profitability of working company with digital virtual screen

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The Rolls-Royce Holdings (LSE: RR.) share price has climbed more than 1,300% since its lowest point of 2020. And I see reasons to think it could head even higher. Or lower.

At the most pessimistic point, many investors feared the worst. With debt looking like it might be too much to recover from, the company was almost priced to go bust.

But the doom-mongers had reckoned without the heroics of the Rolls-Royce management team, and new CEO Tufan Erginbilgiç.

Should you invest £1,000 in NIO right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if NIO made the list?

See the 6 stocks

When the new boss took control in 2023, he famously told employees that they were standing on a “burning platform” and they had one last chance to change it. They changed it.

Created with Highcharts 11.4.3Rolls-Royce Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Where next?

With the share price up above 550p, after having dipped below 40p in 2020, what can we look forward to now?

One thing I do is check out what broker forecasts say, and they look pretty buoyant to me.

Out of 17 analysts, I see only two who think we should ‘sell’. The majority have Rolls shares as a ‘buy’, while just a small handful have them on ‘hold’. But then it gets weird.

According to MarketScreener, the average broker price forecast stands at 547p. And at the time of writing, the price is already above that.

So they think the price will fall, but that we should buy? Well, don’t let anyone tell you that share price forecasts involve a rational process. I treat them with a bigger helping of salt than I put on my chips.

Wide range

That average target does hide a very wide range, though. We’re talking about a highest target of 700p, which could make Rolls-Royce shares still look cheap now.

But at the other end, the most bearish broker sees a crash all the way down to just 240p.

I makes me wonder if these folk are all looking at the same company. And if they’re using any kind of established analysis methods other than just pulling numbers out of the air.

Still, we long-term investors know that we have to do our own research, come to our own conclusions, and make our own buy/sell decisions.

So can we do any better, looking more closely at valuation measures?

Stock valuation

Today’s forecasts put Rolls shares on a price-to-earnings (P/E) ratio of a bit over 31. If the real worth is no more than the FTSE 100 average, that could signal a 50% price fall to around 275p. Hmm, maybe I see where the broker bears are coming from.

But then, I’d say Rolls-Royce is far from average, with strong earnings growth expected.

That growth could drop the P/E to 24 by 2026. At GE Aerospace in the US, we see a 2026 P/E of 28. US-listed shares usually trade at higher P/E multiples, so maybe that means Rolls isn’t such a bargain.

The future

Will I buy? At today’s price I’d need to be more enthusiastic about the bullish possibilities, especially as I’m less uncertain about many other stocks. But that could change if we get any dips.

Should you invest £1,000 in NIO right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if NIO made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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.

More on Investing Articles

Investing Articles

At a 52-week low but forecast to rise 73%! Is this growth share the FTSE’s top recovery play? 

This FTSE 100 growth share has taken an absolute beating over the past two years but Harvey Jones says the…

Read more »

Investing Articles

This FTSE 250 share offers a juicy 9.8% yield. Will it last?

This well-known FTSE 250 share has a percentage dividend yield approaching double digits. Should Christopher Ruane add the income share…

Read more »

Investing Articles

Is a £333,000 portfolio enough to retire and live off passive income?

A third of a million pounds can generate a serious amount of passive income, but relying on this sum alone…

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing For Beginners

Why FTSE 100 investors should pay attention to ‘Liberation Day’

Jon Smith explains why the upcoming tariff announcement from across the pond could have an impact on the FTSE 100,…

Read more »

Concept of two young professional men looking at a screen in a technological data centre
Investing Articles

Here’s why Nvidia stock fell 13% in March

The Nvidia stock price rise was looking unstoppable. Should investors now be wondering if the same might be true of…

Read more »

US Stock

It’s ISA deadline week! Here’s my 3-step game plan

Jon Smith tries to calm the hype around the last minute ISA rush to buy stocks and explains why he's…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

£10,000 invested in BAE Systems shares at Christmas is now worth…

BAE Systems shares have been surging in the FTSE 100 in 2025, driven higher by the wavering US commitment to…

Read more »

Investing Articles

Up 19% in 2 weeks, can the Tesla share price rebound further?

Tesla's first-quarter delivery numbers came out today. Will they help persuade our writer to invest his money at the current…

Read more »