Rolls Royce Share Price Forecast - Buy, Sell or Hold?
British engineering giant Rolls Royce suffered a devastating share price impact over the pandemic. The share price was trading at historic lows begging the question ‘Are Rolls Royce shares a good buy or not?’ With the stock price already up more than 60% in the first quarter of 2023 this question is even more important.
In this guide, we go through the research for a Rolls Royce shares buy or sell decision, a Rolls Royce share price forecast 2025, for the short-term and long-term, as well as how to buy Rolls Royce shares using a state-of-the-art investing platform and low commissions.
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Rolls Royce Share Price Forecast - Buy, Sell or Hold?
If you’re looking for a quick Rolls Royce shares buy or sell decision then let’s have a look at what the majority of analysts have as a Rolls-Royce share price forecast. Below is a screenshot of the average analyst ratings from the Wall Street Journal.
Ratings fall under the following categories: buy, overweight, hold, underweight and sell. At the time of writing, the overall consensus regarding Rolls-Royce share price forecast is that it is overweight. However, there is a developing trend in the data that is likely to be interesting to investors.
The analyst ratings show that from three months ago to now, there have been more analysts moving to a buy rating for the Rolls-Royce share price and with fewer analysts are becoming underweight on the stock. When trying to determine a Rolls-Royce Shares buy or sell decision, it’s clear to see more analysts are shifting to the buy side but the stock is currently overweight.
However, this doesn’t mean to say the price will go up immediately. In fact, as it is currently overweight, there is a suggestion that the price could potentially pull back from the recent share price growth. This is a historical trend we can see in the data and past performance is not a reliable indicator for future results or performance. More analysis and factors need to be taken into consideration as we go through further down this article.
Rolls Royce Share Price Forecast in 12 Months
What is more interesting is the actual Rolls Royce share price forecast for the next 12 months. Currently, the 11 analysts offering a 12-month price target for Rolls Royce Holdings PLC, show an average price target of GBX 175.23p with the highest estimate at GBX 254.80p and the lowest estimate at GBX 89.93p.
At the beginning of 2023, the Rolls Royce share price opened the year around GBX 93.00p. Since then it rallied nearly 60% in the first quarter of 2023 alone and closed around GBX 149.00p which is still below the average price target for the share.
Whether the share price moves to this level quickly or falls further before reaching this target requires a more detailed analysis of the company and its share price history. Further down we go through Rolls Royce shares buy or sell research and how to access premium analytical tools to help with knowing when to invest in the stock market.
How to Buy Rolls Royce Shares
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Rolls Royce Shares History
Rolls Royce is a company with a long history. Founded in 1904, the company operates across three core sectors: civil aerospace, defence and power systems. From 2003 to 2014, the aerospace and defence company experienced one of its best periods. The share price rose from an all-time low of around 22.00 to a record high of around 407.00 - a more than 1,950% move higher.
However, since this record high the company struggled. The share price crashed more than 90% lower from its all-time of around 407.00 to a 2020 low of around 33.20 just after the pandemic. In 2017 the company Royce posted its largest ever pre-tax loss of £4.6 billion. This was largely down to a £4.4 billion write-down on failed currency hedges with a £671 million bribery and corruption charge with the US Department and Justice and Serious Fraud Office.
The Rolls Royce share price is now up more than 300% from the low of 2020 to the start of 2023 after the company announced cost-cutting measures that have cut its cost base by a third. It has also enjoyed a rebound in the airline industry with a 25% jump in sales in its Civil Aerospace division in 2022. Servicing revenues were also up 35% year on year and this is while the airline industry is still currently operating at around 70% of its pre-pandemic level.
However, with concerns around high inflation and a slowdown in consumer spending, many investors are asking the question ‘are Rolls Royce shares a good buy or not?’
Rolls Royce Shares Buy or Sell Research
From the analyst ratings discussed earlier on, it’s clear that the Rolls Royce share price prediction over the next 12 months is for it to rise (albeit probably not in a straight line and without any guarantees). However, investors may want to take a more longer term view of Rolls Royce to try and weather any short-term volatility.
A Rolls Royce share price prediction 2025 may be more prudent to focus on. To analyse the prospects where Rolls Royce could be trading in 2025, we need to look at the fundamentals, as well as market positioning.
The Fundamental Picture
In 2018, a few years before the coronavirus pandemic, Rolls Royce was already in trouble. This is why the company announced a huge restructuring plan. This involved decentralising its civil aerospace, defence and power systems units and removing middle management functions.
During the coronavirus pandemic of 2020, the company had to accelerate its restructuring plans after the operation shutdown of its civil aerospace unit. Now, the company has cut more than 8,000 jobs worldwide amounting to cutting a third of its cost base.
The company’s most recent earnings report highlighted the positive impact this has had on the business. Figures showed the company returned to a profit while management highlighted they are confident in the company generating cash by the end of the year.
The key to a Rolls Royce share price prediction 2025 is whether or not the rise in consumer airline travel will continue to rise. Many consumers were holding on to travel plans over the pandemic with the industry now seeing a big rush of airline travellers. However, this will peak at some point which could affect the company's sales and servicing division for civil aircraft.
Some analysts have highlighted that increasing tensions between US and China and the ongoing Russia-Ukraine war may help Rolls Royce's military revenue as the company provides technology to armed forces as well.
The Technical Picture
Since the sharp drop in Rolls Royce’s share price in 2018, the price has stabilised into a small trading range, around historic lows not seen for decades. The price has already bounced off long-term technical support shown by the black horizontal line in the long-term Rolls Royce price chart shown below.
As Rolls Royce is trading at the end of a possible long-term downtrend, the share price is exhibiting more value investing characteristics than growth investing characteristics. A key test will be if the price can break through its multi-year high from 2021 above GBX 153.00p. This could then give it space to rise higher and try to recover some of the huge declines seen since 2014.
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FAQs on Rolls Royce Share Price Forecast
How to buy Rolls Royce shares?
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