Rankings Defence, aerospace & space Rolls-Royce
Rolls-Royce
87
15070100
A view of the same findings, not a new score. How it works
In the 70+ zone: a score above 70 with more than 20% upside to the median analyst target.
Biggest deductions
- Multiples vs own history−7
- FCF yield and peers−4
- Growth quality (one-off lift)−3
Strengths
- Raised guidance+3
- Buybacks covered by FCF+1
How the score is built
From 100 to 87, step by step: points off for the business, the price and the cracks, back for documented strengths, then three data adjustments.
Start
Score
Hover or select a step to see what drove it. Steps with findings open them below.
Key numbers
As of 3 Nov 2026. Analyst targets tend to be optimistic; read upside as a hint, not a forecast.
- Price
- 1,250 GBP
- Median analyst target
- 1,740 GBP
- Upside to median
- +39.2%
- Analysts
- 20
- Target range
- 1,199 – 2,000 GBP
- 52-week change
- +8%
- P/E (trailing)
- 34.6
- Forward P/E
- 27.0
- PEG
- 1.47
Findings
Every deduction and every plus, with its source. Open a step to read them.
Business
Is the company getting stronger, not just bigger? · 2 findings−5 of −30
- −3Growth quality (one-off lift)Contractual margin improvements in Civil Aerospace contributed £497m in H1 2026, equal to about 20% of underlying operating profit of £2,534m. Management itself expects a smaller contribution in H2. Part of the margin lift is thus renegotiation and catch-ups, not recurring operations.
- −2Future segmentRolls-Royce is present only in widebody engines and has no product in the narrowbody market, which is the largest by volume. The comeback with UltraFan 30 (a programme of about GBP 3bn) still lacks a partner and an aircraft maker; test running is not expected until 2028.
Price
Today's multiples against the company's own history and its peers. · 2 findings−11 of −35
- −7Multiples vs own historyEV/EBITDA 20.4 vs 10.5–20.7 in 2021–25, EV/FCF 24.9 vs 11.3–24.1 and P/FCF 25.4 vs 6.7–24.4: all at or above the top of the range. Forward P/E 28.8 is mid-range of 22–37, but that history is built on the crisis-low earnings. The stock has risen about 14-fold in three years, and the re-rating is fully priced in.
- −4FCF yield and peersWith a market value of GBP 113bn, the guided 2026 FCF of GBP 3.8–4.0bn gives an FCF yield of only about 3.4%. The dividend yield is 0.9%. Forward P/E of 28.8 is in line with Safran (28.5), so there is no discount relative to peers.
Cracks
Cash flow, customers, debt, insiders, guidance and what sits behind the headline numbers. · 4 findings−8 of −35
- −3Cash flow and customer prepaymentsThe cash rests on customer prepayments. Contract liabilities (unearned revenue) are £17.4bn vs net cash of £2.1bn. Growth in the netted LTSA balance fell in H1 to £86m from £472m a year earlier, so this tailwind to FCF is fading.
- −2Macro (Middle East and flight hours)Rolls-Royce now expects flight hours for large engines at the low end of 115–120% of the 2019 level. The Gulf airlines are large Trent customers, and GE Aerospace cut its flight hours forecast in the spring because of the conflict. The aftermarket is the largest source of profit.
- −2Supply chainSupply chain problems in aviation cost GBP 150–200m in cash flow in 2026, and the outflow continues to a lesser extent in 2027.
- −1Durability (Trent 1000/XWB)The durability programmes are still running. Only just under half of the Trent 1000 TEN fleet has received new HPT blades, and life extensions on the Trent XWB-84 are not expected to be certified until the turn of the year. Historically this has led to AOG costs and compensation to customers.
Plus
Only documented strengths. · 2 findings+4 of +15
- +3Raised guidance2026 guidance was raised in July: underlying operating profit £4.7–4.9bn (from 4.0–4.2) and FCF £3.8–4.0bn (from 3.6–3.8). This came after H1 with +46% operating profit and a margin of 22.5%.
- +1Buybacks covered by FCFThe buyback of GBP 2.5bn in 2026 and dividend of about GBP 1bn are below the guided FCF of GBP 3.8–4.0bn. The share count fell 0.7% in a year (buyback GBP 1,725m TTM in the cash flow statement).
Caveats
What the score does not capture, or where the data is weak.
The share price is in pence (GBX), while the financial figures are in pounds. Own multiple history 2021–23 stems from the crisis and turnaround years and is therefore a skewed basis for comparison, so the finding rests mostly on EV/EBITDA, P/FCF and peers (Safran, MTU, GE Aerospace). Reported profit differs greatly from underlying: statutory PBT in H1 was £1,931m vs £2,495m underlying, and 2025 was lifted by recognition of deferred tax. The offsetting item has not been reviewed in detail. Net cash of £2.1bn is financed by customer prepayments (LTSA) and therefore does not count as a plus. Pension, SMR consumption and tariffs are not examined in depth. No discretionary insider purchases, only tax sales on vesting.
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