# Rolls-Royce Holdings (RR.LSE)

Canonical: https://gigainvestors.com/s/RR.LSE

Analysis as of: 2026-10-16T07:33:35.925Z. Financial observations: FY1996–FY2025.

Listing currency: GBX. Reporting currency: GBP.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: GBX 1,362.80 per share; close as of 2026-10-15.

Estimated value: low GBX 405.33 per share, central GBX 450.74 per share, high GBX 511.19 per share. Buy at or below the central value GBX 450.74 per share. Valuation as of 2026-10-16T07:33:35.925Z; scenarios are not confidence intervals.

Expected annual return: 5.0% at the stated quote. About 5.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; GB 10-year bond 5.4% + 4 points).

## Checklist

### understandable: fail

- 3 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 5

- Operating margin variation: 3.10×

Chart: Operating margin; fiscal year observations.

- FY2016: -0.01×

- FY2017: 0.08×

- FY2018: -0.07×

- FY2019: -0.05×

- FY2020: -0.17×

- FY2021: 0.05×

- FY2022: 0.06×

- FY2023: 0.12×

- FY2024: 0.15×

- FY2025: 0.17×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 17.3%

- ROIC, second-lowest year: -29.3%

- Typical minus recent gross margin: -2.7 pp

- Typical gross margin (annual median): 19.7%

- Recent gross margin (lower of latest and 3-year median): 22.3%

- Years with nonpositive capital: 8

- Capital spending / revenue: 4.6%

- ROIC including acquisitions, ten-year median: 54.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: -11.9%

- FY2017: 21.6%

- FY2018: -23.2%

- FY2019: -29.3%

- FY2020: -64.0%

- FY2021: 13.0%

- FY2022: >100%

- FY2023: 92.7%

- FY2024: 68.8%

- FY2025: 43.9%

### economics: pass

- Owner earnings / net income, 5-yr: 1.01×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: GBP 9.8B

- Net income, five-year total: GBP 9.6B

- Return on incremental invested capital: 94.4%

- Working capital / revenue, annual change: 0.8 pp

- Working capital / revenue, change between three-year averages: 6.7 pp

- Working capital / revenue, final three-year average: 57.1%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 3.82×

- FY2022: 0.82×

- FY2023: 0.96×

- FY2024: 0.88×

- FY2025: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: -11.9% vs 68.8%

- Per-share earnings: 0.02 to 0.30 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 4.6%

- Ordinary dilution, 5-year annual growth: 0.1%

- Market cap gain: GBP 84B

- Cumulative retained earnings: GBP 162M

- Diluted shares, 10-year annual growth: 4.6%

- Diluted shares, 5-year annual growth: 0.1%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 44.7%

- Per-share value change: GBP 0.28

- Per-share value, starting three-year median: GBP 0.02

- Per-share value, ending three-year median: GBP 0.30

- Buybacks concentrated in cheaper years (correlation): -0.05

- Average buyback yield: 0.7%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: GBP 5.5B

- Cumulative net income, 10 years: GBP 2.9B

- ROIC, first three-year median: -11.9%

- ROIC, last three-year median: 68.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: GBP -0.76

- FY2017: GBP 0.78

- FY2018: GBP -0.44

- FY2019: GBP -0.23

- FY2020: GBP -0.38

- FY2021: GBP 0.01

- FY2022: GBP -0.15

- FY2023: GBP 0.29

- FY2024: GBP 0.30

- FY2025: GBP 0.70

### accounting: pass

- Sloan accruals: 3.8%

- Receivables to sales index (DSRI): 0.89×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 2.4%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.75×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.69×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -21.3%

- FY2017: 8.0%

- FY2018: -14.5%

- FY2019: -11.2%

- FY2020: -0.5%

- FY2021: 1.3%

- FY2022: -10.6%

- FY2023: -0.2%

- FY2024: -3.5%

- FY2025: 3.8%

## Holders

- [Robert Torray](https://gigainvestors.com/T): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 16.5% a year for ten years · "Rolls-Royce Shares Surge to Record Highs After Guidance Raise" (finance.yahoo.com, Jul 2025) · sales +12.2%

Story as of 2026-10-16T09:59:56.847Z; price observation 2026-10-15.

Price needs cash profits to grow 16.5% a year for ten years

- 2025-07-31: Rolls-Royce Shares Surge to Record Highs After Guidance Raise ([finance.yahoo.com](https://finance.yahoo.com/m/3c4f805e-59ab-3efe-b13c-ba3f7125dc5f/rolls-royce-shares-surge-to.html))

- 2026-02-26: Rolls-Royce makes £1 billion more profit after major defence orders ([uk.finance.yahoo.com](https://uk.finance.yahoo.com/news/rolls-royce-makes-1-billion-082653957.html))

- 2026-05-14: Rolls-Royce Euro Bonds And Defense Wins Reframe Funding And Cash Flows ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/rolls-royce-euro-bonds-defense-011027626.html))

- 2026-06-03: Rolls-Royce Shares Climb 40% As Engine Comeback Gains Orders ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/rolls-royce-shares-climb-40-201252802.html))

- 2026-07-30: Rolls-Royce H1 2026 earnings beat on defense, AI demand ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/rolls-royce-h1-2026-earnings-122621345.html))

### Sales · FY2024–2025

sales +12.2%; source https://filings.xbrl.org/213800EC7997ZBLZJH69/2025-12-31/ESEF/GB/0/213800EC7997ZBLZJH69-2025-12-31/reports/213800EC7997ZBLZJH69-2025-12-31-T01.xhtml; observed 2026-03-10.

- FY2016: GBP 15B 

- FY2017: GBP 16B 

- FY2018: GBP 16B 

- FY2019: GBP 17B 

- FY2020: GBP 11B 

- FY2021: GBP 11B 

- FY2022: GBP 14B 

- FY2023: GBP 16B 

- FY2024: GBP 19B 

- FY2025: GBP 21B 

### Gross margin · FY2025

gross margin 27.9%; source https://filings.xbrl.org/213800EC7997ZBLZJH69/2025-12-31/ESEF/GB/0/213800EC7997ZBLZJH69-2025-12-31/reports/213800EC7997ZBLZJH69-2025-12-31-T01.xhtml; observed 2026-03-10.

- FY2016: 20.4% 

- FY2017: 19.5% 

- FY2018: 7.6% 

- FY2019: 5.7% 

- FY2020: 9.7% 

- FY2021: 19.0% 

- FY2022: 19.9% 

- FY2023: 22.0% 

- FY2024: 22.3% 

- FY2025: 27.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in aerospace & defense; annual sales are GBP 21.2 billion.

- Source: https://filings.xbrl.org/213800EC7997ZBLZJH69/2025-12-31/ESEF/GB/0/213800EC7997ZBLZJH69-2025-12-31/reports/213800EC7997ZBLZJH69-2025-12-31-T01.xhtml (filed 2026-03-10); FY2025: revenue 21207000000; grossProfit 5917000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); RR.LSE: Rolls-Royce Holdings plc designs and manages mission-critical power systems in the United Kingdom and internationally. The company operates through three segments: Civil Aerospace, Defence, and Power Systems. The Civil Aerospace segment develops, manufactures, markets, and sells aero engines for large commercial aircraft, regional jet, and business aviation markets, as well as provides aftermarket services. The Defence segment is involved in the development, manufacture, marketing, and sale of military aero engines, naval engines, and submarine nuclear power plants, as well as offers aftermarket services. The Power Systems segment engages in the development, manufacture, marketing, and sale of integrated solutions for onsite power and propulsion under the mtu brand name. Rolls-Royce Holdings plc was founded in 1884 and is headquartered in London, the United Kingdom.

### Why customers stay

Margins ranged from 22% to 27.9% during 2023–25; it earns 17.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-10); FY2023: grossProfit / revenue = 22%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-10); FY2024: grossProfit / revenue = 22.3%.

- Source: https://filings.xbrl.org/213800EC7997ZBLZJH69/2025-12-31/ESEF/GB/0/213800EC7997ZBLZJH69-2025-12-31/reports/213800EC7997ZBLZJH69-2025-12-31-T01.xhtml (filed 2026-03-10); FY2025: grossProfit / revenue = 27.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-10); 10-year return on capital observations [[2016,-0.11898117386489479],[2017,0.2160846377941276],[2018,-0.2320680044593088],[2019,-0.2925292334343872],[2020,-0.6403123715577477],[2021,0.13014450867052024],[2022,1.000001],[2023,0.9266493050391945],[2024,0.6881363959270661],[2025,0.43868189345683894]]; median 0.17311457323232393. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back GBP 1 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-10); FY2017: growth capex 346777345.7888131; upkeep 1399222654.211187; owner earnings 3600777345.788813. Growth capex / owner earnings = 0.0963062451485307.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-10); FY2021: growth capex 0; upkeep 328000000; owner earnings 458200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-10); FY2023: growth capex 0; upkeep 713000000; owner earnings 2315000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-10); FY2024: growth capex 0; upkeep 886000000; owner earnings 2211000000. Growth capex / owner earnings = 0.

- Source: https://filings.xbrl.org/213800EC7997ZBLZJH69/2025-12-31/ESEF/GB/0/213800EC7997ZBLZJH69-2025-12-31/reports/213800EC7997ZBLZJH69-2025-12-31-T01.xhtml (filed 2026-03-10); FY2025: growth capex 0; upkeep 621000000; owner earnings 5828000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-10); Dividend observations: [[2016,301000000],[2017,214000000],[2018,216000000],[2019,220000000],[2020,91000000],[2021,3000000],[2022,1000000],[2023,1000000],[2024,1000000],[2025,885000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://filings.xbrl.org/213800EC7997ZBLZJH69/2025-12-31/ESEF/GB/0/213800EC7997ZBLZJH69-2025-12-31/reports/213800EC7997ZBLZJH69-2025-12-31-T01.xhtml (filed 2026-03-10); FY2025: cash repurchases 1010000000 GBP.

### Are managers owners

Insiders own 0.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); RR.LSE SharesStats.PercentInsiders = 0.05 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 16.5% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-10); Ten-year compound average after fade. Initial solved rate 0.22675176713639955. Price 1362.8; FX 100; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -0.0003744328443680895 → FY2025 0.6936342160189752. Closing-price date 2026-10-15.

## Monthly share-price history (GBX per share)

- 2016-11: GBX 232.15 per share

- 2016-12: GBX 229.24 per share

- 2017-01: GBX 229.06 per share

- 2017-02: GBX 270.07 per share

- 2017-03: GBX 258.75 per share

- 2017-04: GBX 278.65 per share

- 2017-05: GBX 297.70 per share

- 2017-06: GBX 305.76 per share

- 2017-07: GBX 304.73 per share

- 2017-08: GBX 313.66 per share

- 2017-09: GBX 304.39 per share

- 2017-10: GBX 333.90 per share

- 2017-11: GBX 294.10 per share

- 2017-12: GBX 290.66 per share

- 2018-01: GBX 299.24 per share

- 2018-02: GBX 288.12 per share

- 2018-03: GBX 299.11 per share

- 2018-04: GBX 288.26 per share

- 2018-05: GBX 282.98 per share

- 2018-06: GBX 339.12 per share

- 2018-07: GBX 340.08 per share

- 2018-08: GBX 344.88 per share

- 2018-09: GBX 338.84 per share

- 2018-10: GBX 287.92 per share

- 2018-11: GBX 291.56 per share

- 2018-12: GBX 284.83 per share

- 2019-01: GBX 303.50 per share

- 2019-02: GBX 327.73 per share

- 2019-03: GBX 309.95 per share

- 2019-04: GBX 313.86 per share

- 2019-05: GBX 295.12 per share

- 2019-06: GBX 288.40 per share

- 2019-07: GBX 295.81 per share

- 2019-08: GBX 264.65 per share

- 2019-09: GBX 271.93 per share

- 2019-10: GBX 243.31 per share

- 2019-11: GBX 244.20 per share

- 2019-12: GBX 234.45 per share

- 2020-01: GBX 229.92 per share

- 2020-02: GBX 212.76 per share

- 2020-03: GBX 116.88 per share

- 2020-04: GBX 113.25 per share

- 2020-05: GBX 93.20 per share

- 2020-06: GBX 97.94 per share

- 2020-07: GBX 79.48 per share

- 2020-08: GBX 82.74 per share

- 2020-09: GBX 44.61 per share

- 2020-10: GBX 71.32 per share

- 2020-11: GBX 105.70 per share

- 2020-12: GBX 111.25 per share

- 2021-01: GBX 91.70 per share

- 2021-02: GBX 107.70 per share

- 2021-03: GBX 105.30 per share

- 2021-04: GBX 104.62 per share

- 2021-05: GBX 107.02 per share

- 2021-06: GBX 98.92 per share

- 2021-07: GBX 99.71 per share

- 2021-08: GBX 114.86 per share

- 2021-09: GBX 140.14 per share

- 2021-10: GBX 131.84 per share

- 2021-11: GBX 122.50 per share

- 2021-12: GBX 122.88 per share

- 2022-01: GBX 114.50 per share

- 2022-02: GBX 103.50 per share

- 2022-03: GBX 101.10 per share

- 2022-04: GBX 83.29 per share

- 2022-05: GBX 86.69 per share

- 2022-06: GBX 82.95 per share

- 2022-07: GBX 89.27 per share

- 2022-08: GBX 77.00 per share

- 2022-09: GBX 69.59 per share

- 2022-10: GBX 78.15 per share

- 2022-11: GBX 90.92 per share

- 2022-12: GBX 93.20 per share

- 2023-01: GBX 105.74 per share

- 2023-02: GBX 144.94 per share

- 2023-03: GBX 149.02 per share

- 2023-04: GBX 152.15 per share

- 2023-05: GBX 143.30 per share

- 2023-06: GBX 151.05 per share

- 2023-07: GBX 184.85 per share

- 2023-08: GBX 222.30 per share

- 2023-09: GBX 220.90 per share

- 2023-10: GBX 215.40 per share

- 2023-11: GBX 268.80 per share

- 2023-12: GBX 299.70 per share

- 2024-01: GBX 301.20 per share

- 2024-02: GBX 369.10 per share

- 2024-03: GBX 426.70 per share

- 2024-04: GBX 413.10 per share

- 2024-05: GBX 453.40 per share

- 2024-06: GBX 456.80 per share

- 2024-07: GBX 449.60 per share

- 2024-08: GBX 496.40 per share

- 2024-09: GBX 527.20 per share

- 2024-10: GBX 535.40 per share

- 2024-11: GBX 558.60 per share

- 2024-12: GBX 568.60 per share

- 2025-01: GBX 606.00 per share

- 2025-02: GBX 744.00 per share

- 2025-03: GBX 749.00 per share

- 2025-04: GBX 754.20 per share

- 2025-05: GBX 866.20 per share

- 2025-06: GBX 967.60 per share

- 2025-07: GBX 1,072.00 per share

- 2025-08: GBX 1,070.00 per share

- 2025-09: GBX 1,190.00 per share

- 2025-10: GBX 1,167.00 per share

- 2025-11: GBX 1,068.00 per share

- 2025-12: GBX 1,150.00 per share

- 2026-01: GBX 1,211.00 per share

- 2026-02: GBX 1,333.50 per share

- 2026-03: GBX 1,132.00 per share

- 2026-04: GBX 1,182.00 per share

- 2026-05: GBX 1,337.40 per share

- 2026-06: GBX 1,444.60 per share

- 2026-07: GBX 1,467.80 per share

- 2026-08: GBX 1,530.20 per share

- 2026-09: GBX 1,461.60 per share

- 2026-10: GBX 1,345.60 per share

## Annual estimated value (GBX per share)

- FY2024: low GBX 159.09 per share, central GBX 172.88 per share, high GBX 191.24 per share

- FY2025: low GBX 395.21 per share, central GBX 439.68 per share, high GBX 498.89 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:39:21.826Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original ESEF filing](https://filings.xbrl.org/213800EC7997ZBLZJH69/2025-12-31/ESEF/GB/0/213800EC7997ZBLZJH69-2025-12-31/reports/213800EC7997ZBLZJH69-2025-12-31-T01.xhtml); period 2025-12-31, filed 2026-03-10.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.