Here’s what £20,000 invested in Rolls-Royce shares at the start of 2024 is worth today

2024 was another brilliant year for Rolls-Royce shares, which almost doubled investors’ money. Harvey Jones now wonders if the excitement can continue.

| 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.

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.

Rolls-Royce (LSE: RR) shares took off like a rocket in autumn 2022 and they’ve been flying ever since. They’re up almost 500% over two years. Who needs Nvidia anyway?

I’m generally wary of momentum stocks assuming that at some point, they’ll burn themselves out. Yet to my surprise, the Rolls-Royce share price continued to shine in 2024.

It opened the year trading at around 297p. Today, it’s nudging 587p. That’s an increase of a 97.6%. There was no dividend. That went during the pandemic but should make its long-awaited comeback this year.

Should you invest £1,000 in Rolls-Royce 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 Rolls-Royce made the list?

See the 6 stocks

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

This FTSE 100 stock’s a world beater

If I’d been brave enough to invest my full £20,000 Stocks and Shares ISA allowance in the FTSE 100 engineering giant at the start of 2024, I’d have a whopping £39,520 today. That shows the greater potential rewards of investing in individual stocks, rather than merely tracking an index. Naturally, the risks are higher too.

I won’t calculate how much I’d have if I’d invested £20,000 in Rolls-Royce two years ago. That would just make me sad.

I do hold this stock so I’ve participated in its success but as ever, the only question that really matters is where will Rolls-Royce goes next?

I’ll make one confident prediction. The share price isn’t going to rise 100% or 500% or anything like that. Transformative CEO Tufan Erginbilgic has sprinkled his magic, but hard work lies ahead. With the shares trading at 42.79 times trailing earnings, he can’t afford any slip-ups. Rolls-Royce is priced for growth, and had better deliver it.

Erginbilgic deserves his early success for working hard to change the company’s culture, boost its operational efficiency, reduce costs and expand margins. He’s also got lucky, timing his arrival just before the post-Covid recovery in global aviation, which revived demand for the company’s jet engines and aftermarket services.

Rolls-Royce isn’t just about aircraft engines, of course. Q3 results, published on 7 November, showed strong demand remaining across all three divisions: civil aerospace, defence and power systems.

Growth will be a lot slower

The group’s also pushing into green technology, such as small modular nuclear reactors and sustainable aviation fuels. With luck, this could drive long-term value, but that’s far from guaranteed.

An economic slowdown, geopolitical tensions and supply chain disruptions could all knock Rolls-Royce off course in 2025. Its Trent 1000 engines remain controversial, and US rival Boeing has shown us the pain technical problems can inflict on a company’s share price.

The 12 analysts offering one-year share price forecasts for Rolls-Royce have produced a median target of 609.6p. If correct, that’s an increase of a meagre 4.2% from today. That’s a bit of a comedown, after all the recent excitement. The shares made fare better if we get a broader economic recovery. That’s in the balance too.

Eight analysts nonetheless label the stock a Strong Buy, with another two calling it a Buy. Only one calls it a Strong Sell.

Anybody coming to this stock today must accept they’ve missed the best bit. It feels a bit like wandering into a film just as the credits roll. I’m holding on to my Rolls-Royce shares for the long-term, but won’t be investing more. And certainly not £20,000.

But there are other promising opportunities in the stock market right now. In fact, here are:

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

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.

Harvey Jones 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.

More on Investing Articles

artificial intelligence investing algorithms
Investing Articles

Up 272% in just a year, is Palantir stock just getting started?

This writer recognises that Palantir has grown its business very well -- but does the stock price offer him an…

Read more »

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Up 50%? The Aston Martin share price forecast is mind-blowing! 

If analysts are right, the Aston Aston Martin share price could absolutely rocket in the year ahead. Harvey Jones says…

Read more »

Investing Articles

As the S&P 500 drops, here are 2 Stocks and Shares ISA holdings I’m watching

Our writer has different views on how President Trump's tariffs might affect these two US holdings in his Stocks and…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

£10,000 invested in Tesla stock at Christmas is now worth…

Tesla stock has been one of best-performing investments of the past decade. But things haven't gone to plan for investors…

Read more »

Investing Articles

Up 279% in 5 years, could Meta stock keep soaring?

Meta stock has more than tripled in five years. This writer sees lots to like about the business but also…

Read more »

Pink 3D image of the numbers '2025' growing in size
Investing Articles

25% total return in a year? Is now the perfect time to buy BP shares?

BP shares are on the front line of today's global economic and political uncertainty but analysts think they can still…

Read more »

Affectionate Asian senior mother and daughter using smartphone together at home, smiling joyfully
Investing Articles

With Cash ISA changes coming, could now be the time to consider buying shares?

Changes to the Cash ISA could lead to greater investment in the stock market. This could be a good thing…

Read more »

Investing Articles

These FTSE 100 dividend shares just got cheaper, thanks to President Trump!

Investors buying dividend shares can lock in bigger long-term yields when share prices take a tumble. These two just did…

Read more »