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20 June 2021
14:42 hour

This is what I’m doing about the Rolls-Royce share price!

The Motley Fool UK

17/05/2021 - 08:23

The Rolls-Royce share price has remained strong, despite rising inflationary concerns. Should I buy the FTSE 100 flyer for my portfolio today? The post This is what I’m doing about the Rolls-Royce share price! appeared first on The Motley Fool UK.


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  1. Rolls Royce? (24/02/2021 - Reddit Stocks)
    Hey everyone. Just wondering what the thoughts on rolls royce are? The pandemic really hit their price hard. Dropped from £10 to just under £1. The beloved British company recently just won a contract in India too. I won't go I to too much details. All details are at your fingertips.   submitted by   /u/TopSeaworthiness7501 [link]   [comments]
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  2. 2 reasons to buy Rolls-Royce at $1.70 (19/03/2021 - Reddit Stocks)
    My thesis for buying $RYCEY (Rolls-Royce) is this simple line here: “In terms of their aims, management has a goal of developing low carbon solutions for hybrid, hydrogen, and electric powered craft"?????? 1.) I think 2021/22 might be a better year 2.) Free cash flow for these new green solutions 2 reasons to buy Rolls Royce   submitted by   /u/xsweeperx [link]   [comments]
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  3. If you haven’t yet, I recommend looking at this Rolls Royce Long ETF, as Rolls Royce is starting to pick up! Not a financial advisor. (23/02/2021 - Reddit Stock Market)
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  4. Could the Rolls-Royce share price fall below 100p? (27/05/2021 - The Motley Fool UK)
    One of the frustrating things for shareholders in Rolls-Royce (LSE: RR) in recent months has been its struggle to maintain altitude. The Rolls-Royce share price reached 127p in March. But since then it has moved markedly lower. Over the past year, it has lost 10% of its value. So might the shares might fall beneath 100p? Why has the Rolls-Royce share price been falling? One of the points to consider is what has been exerting downward pressure on the aerospace giant’s share price lately. The company is significantly exposed to air travel. The more hours planes with its engines installed fly, the greater its service revenue. Over the past couple of months, hopes of increased European travel have been dampened. I think that has affected the share price. Reasons to be bullish But I see some positive signs for the Rolls-Royce share price. For example, the company said this month that performance so far this year has been in line with expectations across all of its business units. That lack of nasty surprises should help restore some investor confidence in Rolls-Royce. The company has repeatedly said that it expects to turn free cash flow positive in the second half of this year. That would be big news, as lately it has been bleeding cash. If it is able to turn free cash flow positive, that will reassure investors about its liquidity. Last year, a rights issue was heavily dilutive. If shareholders are more comfortable about liquidity growing due to free cash flow, it could be positive for the Rolls-Royce share price. Will the shares fall below 100p? Despite what I regard as positive developments, the Rolls-Royce share price has been drifting downwards lately. If there are more reasons to doubt the speed and scale of European aviation recovery, I think that could easily push the shares below 100p. Any further delay to the free cash flow target would also hit the shares badly in my view. So, I don’t think the shares will necessarily stay above 100p. I could certainly see them falling below that level again. My move on the Rolls-Royce share price But I think the longer-term outlook for the Rolls-Royce share price remains good. Flying demand will come back, in my view – it’s just a matter of time. There are some promising signs outside Europe. Already in the US, for example, United Airlines has upgraded its second-quarter earnings forecast. Such improved demand should help Rolls-Royce. I still think the Rolls-Royce share price could get to 150p or higher this year. But I don’t like how sensitive the share price is to demand recovery in the aviation sector. It has no control over that so is effectively a hostage to fortune. For that reason, even though I do see potential upside, I’m not currently planning to buy Rolls-Royce shares. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading This is what I’m doing about the Rolls-Royce share price! As the Rolls-Royce share price remains cheap, I’d invest £3k Is it time to act on the Rolls-Royce share price? Can the Rolls-Royce share price stay above 100p? The Rolls-Royce share price has been ticking upwards. Is it time to buy now? christopherruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Could the Rolls-Royce share price fall below 100p? appeared first on The Motley Fool UK.
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  5. Rolls-Royce share price: what’s in store in the coming months? (26/04/2021 - The Motley Fool UK)
    Rolls-Royce (LSE:RR) was one of the biggest losers of the stock market crash caused by Covid-19 last year. What is ahead for the Rolls-Royce share price in the coming months, and is there an opportunity here for me to pick up cheap shares? Rolls-Royce share price woes Between February 2020 and September 2020, the Rolls-Royce share price lost 80%. Across the whole of 2020, the Rolls-Royce share price declined by over 50%. Its debt levels rose as it borrowed to keep the lights on, and it also cut jobs and announced a rights issue to generate cash flow. In December, the Rolls-Royce share price experienced its highest post-Covid-19 price. Shares were trading for 135p per share. Since that time, however, the share price has fallen over 20%.  Challenges and outlook ahead Airlines are operating more than at this time last year. The issue here is that Covid-19 is still rife and there could be further restrictions if another wave hits. In terms of Rolls-Royce, I believe the overall outlook is improving. I do believe, as I write, the worst of the crisis is over. It has taken the necessary steps to see it through some tough times and has begun to shore up its once-beleaguered balance sheet. There are still some challenges it needs to overcome, however. In a recent trading update, Rolls-Royce predicted a free cash outflow in the region of £2bn in 2021. This is money that is going out of the business that its management team will need to find from somewhere. In the same update, it did mention its £9bn liquidity, which is a good sign in my opinion. This should help with the cash outflow mentioned. The Rolls-Royce share price could benefit in the future if ambitions are achieved. It believes it can generate over £700m of free cash flow by 2022. This is a projection based on past figures and flying hours of engines. Cash is king and this could put Rolls-Royce in a much better position.  My verdict I believe there is lots of recovery potential linked to the Rolls-Royce share price. The issue I have is that this recovery is linked to Covid-19. I don’t think it can handle another scenario whereby planes are grounded and it faces severe losses. It must be noted that different parts of the world are in different states related to the virus. The US seems to be flourishing from an aviation perspective and is a market Rolls-Royce can capitalise on. Asia is struggling right now with a deadly variant, and there seems to be another lockdown on the horizon over there. I believe the current Rolls-Royce share price is not reflective of its improving stature, and I think it will creep up over the coming months. I class it as a high-risk investment but I think it is priced quite low right now. It could make an interesting recovery play for my portfolio. Right now, I would not invest in Rolls Royce shares but will keep a keen eye on developments.  Away from Rolls Royce, here is a tech stock that recently underwent an IPO that I have examined. CEO’s £500,000,000 Stake on Industry’s “Uber” Revolution We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading As the Rolls-Royce share price falls, I’m still buying Will the Rolls-Royce share price recover in the second half of 2021? Why I think I could double my money with the 100p Rolls-Royce share price The Rolls-Royce share price is crashing in April! Should I buy RR today? Does the Rolls-Royce share price make me want to buy in 2021? Jabran Khan has no position in any of the shares mentioned. 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. The post Rolls-Royce share price: what’s in store in the coming months? appeared first on The Motley Fool UK.
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  6. The Rolls-Royce share price is rising this week. Should I buy? (18/02/2021 - The Motley Fool UK)
    For years, I’ve liked Rolls-Royce (LSE: RR), but I’ve never got around to buying. Whenever the time came for me to make an investment, Rolls never quite made the top of my list. Maybe the Rolls-Royce share price looked a bit too high at the time. Or, more usually, there’s just something else I liked better. Warren Buffett famously spoke of investing in Gillette, and the warm feeling he got every morning when he thought of the millions around the world shaving with a new blade. I’ve always had similar feelings watching airline departures and arrivals. And thinking of all those lucrative maintenance contracts bringing in the cash for Rolls-Royce. But no comparison is perfect. Chins are still being shaved around the world during Covid lockdown. But the planes aren’t flying, and the Rolls-Royce share price has suffered. We’ve seen a modest climb this week though. Since market close last Friday, Rolls-Royce shares are up 8%, as I write. But I’d never make an investment decision based solely on short-term share price moves. And the bigger picture isn’t so pretty. Feeling bullish We’re close to a year on from the start of the Covid-19 stock market crash. And, in that year, the Rolls-Royce share price has fallen 58%. But it had been slipping even before that. Over the past two years, Rolls-Royce shares are down 70%. So we’re looking at a pandemic catastrophe on top of an existing downward trend. So why am I starting to feel positive towards the stock? Well, my reason is essentially that I still see the long-term business as sound. When Rolls-Royce will get back to profit, I really can’t guess. And I still expect the rest of 2021 to be rocky for the Rolls-Royce share price. Then there’s the huge amount of debt the company’s had to take on, amounting to around £4bn now. That will have to be addressed some day. But, for now, the key question is whether Rolls will make it through the rest of this crunch year. The firm’s latest update at the end of January essentially said things are in line with expectations. Rolls expects free cash outflow of around £2bn in 2021, and I could see a few eyes watering at the prospects of that. But at the end of 2020, the company had around £9bn in liquidity — which it described as “at the upper end of the previously guided range.” Rolls-Royce share price cheap? Rolls-Royce is hoping for an upturn in the aviation business in the second half of the year. And that’s where I think the big risk lies. The Covid vaccination programme is progressing reasonably well. But there almost seems to be a new virus variant every week. And the government is still urging against booking fly-away holidays just yet. Still, with the Rolls-Royce share price around £1, or less, I really am tempted to buy. But I still don’t know whether I will. Again, it’ll depend on what other options might look more promising when the time for my next purchase comes along. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading The Rolls-Royce share price is under £1: should I buy today? What I think Covid-19 variants mean for the Rolls-Royce share price Rolls-Royce share price: why I’d follow the Archer Aviation SPAC Rolls-Royce and Cineworld: are these UK shares too risky to buy now? The Rolls-Royce share price is down 66% this year. Here’s what I’d do now Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post The Rolls-Royce share price is rising this week. Should I buy? appeared first on The Motley Fool UK.
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  7. Where will the Rolls-Royce share price go in June? (31/05/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) has had one of the rockiest rides of the pandemic. Rolls has been up and down so far in 2021, going nowhere really in May. And we’re still looking at a fall of more than 60% over the past two years. Now, I’m going to say right up front, I’ve no idea where the Rolls-Royce share price is going to go in June. But we’re heading for developments that should affect the longer term. And I still can’t work out whether to buy Rolls-Royce shares as a recovery pick. For one, the next step in pandemic opening up is scheduled for 21 June. On that day, the government has pencilled in the removal of the final legal restrictions on social and business movements. Saying that, there’s that Indian variant thing. And the Prime Minister has already said we might have to wait a bit longer to get our full freedoms back. Further delays could see the Rolls-Royce share price weaken in June. Still, the opening up that we’re already enjoying is having its effect. In particular, sun-seekers are heading for the beaches again. And some travel-related shares are recovering. International Consolidated Airlines shares are up 26% so far in 2021, with easyJet not far behind with a 21% gain. TUI hasn’t had such a good year so far though, dropping a few percent. And the Rolls-Royce share price is down 4%. Rolls-Royce share price drivers It’s probably going to be a while before the travel sector recovery feeds through to Rolls-Royce. It’ll take time before engine maintenance requirements start to ramp up again. The other critical thing is that Rolls-Royce suffered big loss in 2020, and needed a major financial rescue package. There’s still cash on the books to keep the aerospace engineer going for a while yet. But will it be enough to last until profits return? The uncertainty behind that question must, surely, weigh heavily on the Rolls-Royce share price for at least a few months yet. At full-year results time, Rolls wasn’t in a position to make much in the way of predictions. That’s not surprising, as the company spoke of the uncertainties of the near- and medium-term outlook for civil aviation. It’s all about cash And we shouldn’t expect the cash situation to reverse in the current year. With those results, Rolls said it expects free cash flow to turn positive in the second half of 2021. But it still expects to suffer a free cash outflow of around £2bn for the full year. The company is hoping for positive free cash flow in 2022 of at least £750m. But that depends critically on the pace of recovery in flying hours, and the success of the firm’s cost-cutting strategy. I’m keenly awaiting first-half results due on 5 August. Any updates on the expected cash flow situation could drive the Rolls-Royce share price in either direction. In the meantime, any positive news from the aviation business in June and beyond would be welcome. I’m not buying yet. I’m going to wait for the clouds of uncertainty to clear a bit. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading What’s happening to the Rolls-Royce share price? Could the Rolls-Royce share price fall below 100p? This is what I’m doing about the Rolls-Royce share price! As the Rolls-Royce share price remains cheap, I’d invest £3k Is it time to act on the Rolls-Royce share price? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Where will the Rolls-Royce share price go in June? appeared first on The Motley Fool UK.
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  8. Does the Rolls-Royce share price make me want to buy in 2021? (21/04/2021 - The Motley Fool UK)
    As stock market crash stories go, the Rolls-Royce Group (LSE: RR) one is not pretty. But is there going to be a happy ending? Disappointingly, the Rolls-Royce share price recovery has gone off the boil a little, and the price is down so far in 2021. Over the past two years, the damage amounts to a painful 68% fall. Rolls-Royce depends on civil aviation for the biggest slice of its income. And while planes were grounded and engines didn’t need maintenance and repair, income for Rolls was hammered. It’s important to remember, though, that that’s not all there is to Rolls-Royce. The firm also has power systems and defence divisions. Still, the grounding of passenger planes was tough. But things are starting to look better now. Or are they? Folks in the UK seem to be super keen to book their holidays in the sun (almost as keen as they are to get back to the pubs, it seems). And the early 2021 recovery in the Rolls-Royce share price was surely based on anticipation of a sun-seeking summer. Some transport firms, including TUI, have made positive sounds about the prospects for international summer holidays this year. It might happen, and the Rolls-Royce share price could head upwards again. New Covid fears But fresh Covid-19 waves have already started around the world. And only this week, the British Prime Minister warned that we’re likely to see a third wave this year. I doubt it will be as devastating as those already past. But I won’t be booking any flights just yet. The prospects for 2021 don’t really matter too much for me anyway. No, I’m thinking of the longer-term future for the Rolls-Royce share price. About what things will be like in, say, five years. And whether the current valuation of the company suggests the shares are a bargain. And that’s where I’m just not sure. Firstly, Rolls-Royce did get itself into a sustainable financial situation. At least, I think it did, for now at least. Unless things get stretched and the company has to go back to the markets for a fresh injection of cash, that is. Is that likely? If the aviation business doesn’t get going again fairly soon and Rolls doesn’t see an improving income stream, I wouldn’t be surprised. Rolls-Royce share price progress? So when will we see the cash flows needed for sustained Rolls-Royce share price progress? Some observers suggest that aviation could get back to 2019 levels by 2024-2025. But those are among the more optimistic guesses. There’s increasing pressure from climate change too, with carbon emissions targets being brought forward. I wouldn’t be at all surprised if 2019 turned out to be a peak year for leisure flights, not to be equalled for a long time. So, on the one hand, I’m seeing a company that looks undervalued on the face of it, and that I’ve liked for years. And I think the Rolls-Royce share price could indeed have a strong future. But there are just too many uncertainties between now and next year for me. So no, I’m not going to buy in 2021. Maybe 2022. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading 2 ways the Rolls-Royce share price could benefit from the reopening economy Is the Rolls-Royce share price undervalued? Is reopening important for the Rolls-Royce share price? Should I invest in Rolls-Royce or Aston Martin shares right now? This is what I’d do about the Rolls-Royce share price right now! Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Does the Rolls-Royce share price make me want to buy in 2021? appeared first on The Motley Fool UK.
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  9. Rolls-Royce share price is around 100p. Here’s what I’d do (22/02/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE:RR) share price has likely reflected the recent battle between Covid-19 vaccines and variants. Initially, the Pfizer vaccine candidate news really beat efficacy estimates in November and the Rolls-Royce share price rallied. Later, Covid-19 variants spread and made the prospect of a fast recovery in civil aviation more distant. The Rolls-Royce share price fell as a result. With the Rolls-Royce share price now close to the 100p level and everything that’s happened, here’s what I’d do. Vaccines versus variants In the battle between the vaccine and the variants, it’s not the end of the world for Rolls-Royce. While the spread of Covid-19 variants has slowed the recovery in civil aviation, the company still expects to turn cash flow positive at some point in the second half of 2021, according to a trading update released earlier in the year. Management is also confident that they are well positioned for the future given the company’s liquidity of around £9bn. At its current stage, I reckon the Covid-19 vaccines are getting a slight upper hand on the variants. Production of Covid-19 vaccines has ramped up higher and the number of new cases has fallen in many parts of the world. If the number of new cases continue to decline sharply, there is the possibility that civil aviation recovery expectations could increase and this could potentially benefit the Rolls-Royce share price. There could also be hope in the future against variants. Companies like GlaxoSmithKline and CureVac are, for instance, working on multivalent mRNA Covid-19 vaccine candidates that could target variants more effectively. The two companies, which are working together, hope to bring a multivalent product onto the market next year. If the late stage results of those multivalent vaccine candidates are positive, I reckon that civil aviation recovery expectations could increase. With this said, Covid-19 is constantly mutating and there is potential for a new strain to hinder civil aviation more than expected. As a result, the Rolls-Royce share price could always decline. Rolls-Royce share price: what I’d do Given the current information on Covid-19 variants and the current Rolls-Royce share price, I’d buy shares. Making quality and dependable jet engines is one of the hardest things in the world to do. It takes a lot of engineering know-how that I think gives Rolls-Royce a potential competitive advantage in future growth sectors. I think civil aviation will eventually recover and RR could be a good investment as a result. I could be wrong, however, if a new Covid-19 variant spreads and becomes a big problem. I’d also follow the annual result report next month, particularly when it comes to future guidance (if management provides any). If Rolls-Royce beats the market’s real estimates on earnings or guidance, I could see how the stock could go higher. I could also see the stock going lower if the results are underwhelming. I’d also be interested in how the company’s planned sale process of ITP Aero is going. I reckon a higher than expected sale price could help the stock. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Rolls-Royce shares: should I buy? Rolls-Royce share price: how the company is preparing for the air taxi market The Rolls-Royce share price is back above 100p, but I wouldn’t buy the stock yet The Rolls-Royce share price is rising this week. Should I buy? The Rolls-Royce share price is under £1: should I buy today? Jay Yao has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. 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. The post Rolls-Royce share price is around 100p. Here’s what I’d do appeared first on The Motley Fool UK.
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  10. What’s going on with the Rolls-Royce share price? (19/06/2021 - The Motley Fool UK)
    Over the past 12 months, the Rolls-Royce (LSE: RR) share price has essentially moved sideways. The stock has returned -1.5% since this time last year. By comparison, the FTSE All-Share Index has returned 22%. This is a bit of an unfair comparison because the pandemic has severely impacted Rolls-Royce. It suffered one of the most substantial drops in revenue and profitability of any large UK company.  It makes more sense to compare the performance of the Rolls-Royce share price to that of other pandemic-hit businesses such as IAG, easyJet and Tui. But even compared to these stocks, Rolls has underperformed. The three firms outlined above have returned 11%, 24%, and 47%, respectively, over the past 12 months. Tui has achieved this performance even though it’s been bailed out three times by the German government during this period.   Looking at these figures, I’ve been wondering, what’s going on with the Rolls-Royce share price?  Improving outlook  Rolls’ largest division is its aerospace business. This involves the sale and maintenance of engines for the civil aviation industry. The company gets paid based on the number of flying hours its machines rack up. Therefore, when the aviation industry was effectively grounded this time last year, group revenues plunged.  Since then, the industry has started to recover. Air traffic around the world is currently around two-thirds of 2019 levels. As the outlook for the sector has improved, it’s had a positive impact on Rolls’ outlook. The company expects to be cash flow break-even in the second half of the year. This should draw a line under its pandemic losses.  Unfortunately, it seems as if the market is sceptical the company can hit this target. That appears to be the primary reason why the Rolls-Royce share price has underperformed.  It wouldn’t be the first time the company has missed targets. In the past, the group has repeatedly overpromised and underperformed. Therefore, I think the market doesn’t believe in management’s outlook.  Is the Rolls-Royce share price a buy?  I reckon this could be an opportunity for risk-tolerant investors. Despite its improving outlook, the stock still looks cheap. Although there’s always going to be the risk that the company will miss management’s growth targets.  With that being the case, I’d buy the stock for my portfolio today as a speculative recovery play. However, I’m well aware this isn’t a risk-free investment. I think there’s a very high chance the company will underperform this year. If it does, the stock could continue to languish.  That’s why I’d only buy a small speculative position for my portfolio. While I think the Rolls-Royce share price has recovery potential, the global travel and aviation industry outlook is incredibly uncertain. Unfortunately, there’s nothing the company can do about this uncertainty.  The post What’s going on with the Rolls-Royce share price? appeared first on The Motley Fool UK. One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas? Grab this FREE report now. Inside, you discover one FTSE company with a runaway snowball of profits. From 2015-2019… Revenues increased 38.6%. Its net income went up 19.7 times! Since 2012, revenues from regular users have almost DOUBLED The opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer? You could have the full details on this company right now. Grab your free report – while it’s online. More reading Should I buy Tirupati Graphite shares? Will the Rolls-Royce share price ever get back to 200p? Would I buy Rolls-Royce shares or International Consolidated Airlines Group shares? Where will the Rolls-Royce share price go in June? What’s happening to the Rolls-Royce share price? Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.
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  11. Will the Rolls-Royce share price bounceback in 2021? (06/04/2021 - The Motley Fool UK)
    With a 12% fall in the Rolls Royce (LSE: RR) share price in the past three weeks, this question comes up yet again. The Rolls-Royce share price has seen plenty of ups and downs in the past year (though it’s up almost 9.5% over 12 months) given the company’s heightened sensitivity related to all sorts of developments from vaccines to its own finances.  Why did the share price fall? The Rolls-Royce share price fall coincided with the Norwegian government stopping the sale of its marine engines manufacturer, Bergen Engines, to a Russian company. Bergen Engines is a Norway-based business. The Norwegian government sees the sale as a security threat, because it has no security co-operation with Russia.  What does the blocked Bergen Engines’ sale mean for the company? Hiving off Bergen Engines can be seen in the context of the company’s big restructuring, which started almost a year ago. As Rolls-Royce puts it in its release regarding this subsidiary “Bergen Engines….is not core to our long-term strategy”.   Besides slowing-down its overhaul, the blocked sale also means a delay in raising finances. With its business at a near standstill in 2020, Rolls-Royce has planned to raise £2bn through disposals to keep itself well funded. This adds to the company’s other efforts at fundraising, which have included significant new equity and debt, in the past year.  What’s next for the Rolls-Royce share price? Delays in financing itself, especially in these uncertain times, is negative news for the company. There is no way of knowing how long it will take for Rolls-Royce to find another buyer.  Yet, it is one of the many developments that can impact Rolls-Royce right now. Recently, the company started building the world’s biggest aero-engine, which will provide greater fuel-efficiency. Also, it runs on sustainable fuel, which is made of waste products.  Clean energy is a growing focus area for both policy makers and consumers, so this sounds like a step in the right direction. But I think the biggest impact on the Rolls-Royce share price will be from its future financial developments. Some improvements should be visible later this year, as air travel comes back to some extent. I think these can have a positive impact on the company’s stock market performance. Would I buy the shares? While I think that the Rolls-Royce share price can rise over the next few months, albeit unevenly, I am hesitant to make a long-term call on it yet. The reason is that there is still too much up in the air right now.  Rolls-Royce was loss-making even before the pandemic struck, and now it is in an even worse place. I am cautiously positive on the stock given that it has a reputable position in a specialised industry, which cannot be replicated easily. At the same time, its financials are in an undeniable funk too.  I am watching it for a turnaround before buying the share for the long haul.  There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading Will the Rolls-Royce share price keep climbing? Hargreaves Lansdown investors are buying Rolls-Royce shares and IAG. Here’s what I’d do The Rolls-Royce share price: amazing value for my ISA? 2 aerospace stocks I’d buy Rolls-Royce shares: Norway blocks its sale. Should I be worried? Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Will the Rolls-Royce share price bounceback in 2021? appeared first on The Motley Fool UK.
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  12. Rolls-Royce earnings: here’s what will help me decide to buy more shares (10/03/2021 - The Motley Fool UK)
    FTSE 100 stock Rolls-Royce (LSE:RR) will release its earnings report on Thursday 11th March at 9am. It is well expected that the company will report its biggest annual loss in history and go into depth about the detrimental impact the Covid-19 pandemic has had on the business. Nonetheless, I think there might be light at the end of the tunnel for Rolls-Royce shares. Here are the main reasons why I am re-entering Rolls-Royce albeit tentatively, as I think there is a chance that we see a positive rise of the share price after earnings. Rolls-Royce is expected to report its biggest loss ever The market is already expecting the company to have its biggest ever loss on record so that isn’t likely to spook the share price if it is indeed reported. In fact, International Airlines Group recently reported a loss of £7.5 billion and its share price rose 3.5%; I am hoping that we might see something like that for Rolls-Royce’s shares. Reasons the stock could rise I am hoping that the management comes out speaking upbeat on its recovery, especially in terms of its aerospace division. This division manufactures and services engines for the airline industry and makes up 50% of the company’s total earnings. Therefore, with the vaccination roll-out going better than expected in the UK and improving globally, this is positive for Rolls-Royce’s main revenue stream especially as more airlines are now travelling than they did in the fourth quarter. Additionally, I hope we hear more from management about this and that they provide upbeat guidance for the rest of the year, especially with foreign holidays from the UK set to be allowed from 17th May. Reasons Rolls-Royce shares could fall A key metric to focus on will be its liquidity position (cash). During the pandemic, the management team reacted quickly and raised money from a rights issue. They also took measures to cut-costs to make the business leaner, which I think has only made the company a more attractive proposition if it can survive this pandemic. However, if we were to hear that Rolls-Royce may need to do another round of financing, or if it raises concerns about its cash position being able to survive a longer-than-expected recovery, this could send the share price falling. Why I am buying Nevertheless, although the shares have recovered somewhat, they are still significantly down from Rolls-Royce’s pre-pandemic levels of over 600p. That’s why I think now, before its FY earnings, is a great chance to get into this stock. Therefore, I am buying more shares in this global brand in the hope of a boost after earnings, but I will be holding a little bit of money back in case a ‘buy the dip’ opportunity presents itself instead. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Rolls-Royce share price is rising. Should I buy shares now? Tesla has fallen 35%. How I think it affects the Rolls-Royce share price The Rolls-Royce share price: is this best investment for 2021 and beyond? The Rolls-Royce share price is around 110p. Should I buy shares now? Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today Joseph Clark holds shares in Rolls-Royce. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Rolls-Royce earnings: here’s what will help me decide to buy more shares appeared first on The Motley Fool UK.
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  13. Why is the Rolls-Royce share price falling? (10/02/2021 - The Motley Fool UK)
    Over the last month or so the Rolls-Royce (LSE: RR) share price has fallen nearly 15%. That’s worse than the 5% of the FTSE 100. Over 12 months the fall is 60%. So why have the shares continued to fall? Should investors be worried?  Reasons for the Rolls-Royce share price decline New variants of Covid are a source of concern. Although the UK is doing well with the vaccine rollout, many other countries are struggling and there are supply constraints, as the EU/AstraZeneca row highlighted. And the UK, South Africa and Brazil variations have all reignited pandemic concerns. That has implications for travel and, by extension, for Rolls-Royce. A January trading update from the engineer has probably also weighed on the share price. The company revised down forecasts for widebody engine flying hours to 55% of 2019 levels from a 70% estimate last October. It added to this by saying that it expected to lose £2bn in cash as a result. Cashflow was something it was looking to improve, so the setback, while understandable in the context of Covid-19, is still disappointing. Yet emerging technologies like modular nuclear power and electric aircraft could offer a way forward for Rolls-Royce and boost the shares.  But for now, the virus dictates the future of the Rolls-Royce share price. The company can invest in nuclear, marine and other industries to offset some of the aviation losses, but investors (including me) still seem concerned about the company’s flying prospects in the short term, at least. What I plan to do about this potential value share I’m also a little concerned. Even in light of the Rolls-Royce share price being cheaper than it was a month ago and far less than it was a year ago, I’ll avoid the shares. For me they carry too much risk, and a recovery is too fragile. In some ways RR resembles a value share, as it has fallen so much in the wake of challenging trading conditions and the its poor financial performance. With multiple problems to contend with, I’d rather invest in some shares with strong growth potential, rather than the volatile Rolls-Royce share price. An alternative FTSE 100 share One share that I’d rather invest in is the high-yielding insurer, Aviva (LSE: AV). A new CEO is slimming down the business, which should make it easier to manage, and perhaps even attract a takeover from a larger company. That’s happened within the industry, for example with RSA Insurance, so there is a precedent. The shares have a dividend yield of 3.79% and it also seems to show signs of being good value with a P/E of just five.  As a financial share it was particularly hard hit in the sell-off about 12 months ago. That means there’s plenty of room for a share price recovery if the economy improves, I think. On the downside there’s a risk it could underperform if the economy remains weak. Also, its disposals mean it’s now more reliant on the UK and Ireland for earnings so any poor performance here could hurt the share price.  Overall though, I’d prefer to add Aviva shares to my portfolio as the Rolls-Royce share price still looks very volatile.   FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading I think the Rolls-Royce share price could benefit from this potential trillion dollar market Why I think the 94p Rolls-Royce share price could double my money Rolls-Royce share price has declined almost 30%. Here’s what I’d do The Rolls-Royce share price: here’s what I’d do right now The Rolls-Royce share price has fallen again. Should I buy the stock now? Andy Ross owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Why is the Rolls-Royce share price falling? appeared first on The Motley Fool UK.
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  14. What’s happening to the Rolls-Royce share price? (29/05/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE: RR) share price has performed poorly over the past few months. Year-to-date, the stock has returned just 3.7%. Over the past 12 months, it is off nearly 10%.  However, over the same time frame, the company’s underlying fundamental performance has improved markedly.  So, what is really happening to the Rolls-Royce share price? Why are investors still giving the stock the cold shoulder despite its improving fundamentals?  Rolls-Royce share price outlook Two weeks ago, Rolls-Royce issued a trading update for the first few months of 2021. The market had been expecting another update from the business following a rough performance from the company in 2020. Towards the end of last year, management had stated that the company was on track to become free cash flow positive by the second half of 2021. Investors were waiting to see if the company still believed this was possible. As it turns out, management believes it is. According to the company’s latest trading update, management sees it reaching this goal as vaccinations bring the pandemic under control and travellers return to the skies.  This is incredibly positive news. The Rolls-Royce share price has been under pressure for much of the past year due to concerns about the company’s balance sheet and rising losses. The fact that management believes the group will be free cash flow positive at some point in the next six-to-nine months suggests these balance sheet pressures are now behind it. If the company meets its cash flow target, it can focus on growth, but this could be a long way off yet.  Risks and challenges Unfortunately, the company is not out of the woods yet, despite the progress it has made over the past few months.  Vaccinations are making a big impact, but outbreaks are still occurring around the world. It could be several years before the group returns to 2019 levels of sales and profitability. In the meantime, management will have to remain laser-focused on keeping costs low and maximising profitability. Another significant coronavirus outbreak could cause massive disruption. This would undoubtedly throw a spanner in the works of the company’s recovery plans. It may even have to raise more cash from investors if losses return.  I think this is the primary reason why the Rolls-Royce share price has performed the way it has in 2021. Yes, the company seems to be through the worst of the storm, but it still faces a long road to recovery. And any setback could force the business to make some hard choices.  With that being the case, I’m not going to be buying a large holding in Rolls-Royce any time soon. I might be tempted to take a small position, but considering the risks facing the enterprise, I reckon there are better opportunities on the market that would prevent me spending a lot on RR shares. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading Could the Rolls-Royce share price fall below 100p? This is what I’m doing about the Rolls-Royce share price! As the Rolls-Royce share price remains cheap, I’d invest £3k Is it time to act on the Rolls-Royce share price? Can the Rolls-Royce share price stay above 100p? Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post What’s happening to the Rolls-Royce share price? appeared first on The Motley Fool UK.
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  15. The Rolls-Royce share price is rising. Should I buy shares now? (10/03/2021 - The Motley Fool UK)
    Shares in Rolls Royce (LSE: RR) have moved around a fair bit lately. The share price is up 10% so far this year. In this past month alone it’s put on 20%. That performance hasn’t been enough to get the Rolls-Royce share price back to where it was, though — it’s still 40% lower than this time last year. Here I will look at why the share price has been rising and consider whether I ought to add Rolls-Royce to my portfolio right now. The Rolls-Royce share price received a vaccine boost The company’s recent share price increase has coincided with growing vaccination roll out. As an aeroplane engine maker and servicer, the company’s fortunes are tied to demand for air travel. Rising vaccination rates ought to see more countries ease travel restrictions. That is good for Rolls-Royce, as the greater utilisation of engines, the higher the demand for servicing. However, while vaccination rates are rising, air travel is still nowhere near its normal level. The company clearly expects demand to increase. It said it should be cash flow positive in the second half of this year. However, its prior estimate of how fast air travel would return was adjusted downward. I think it is too early to say with any certainty whether air travel demand will actually come back to anything close to normal levels even by the end of this year. The company has substantial liquidity so should be able to ride out the storm even if it doesn’t turn cash flow positive in the second half. But that liquidity has come at a cost, most notably a large dilution of shares in last year’s rights issue. The challenge to the Rolls-Royce share price isn’t just about demand from airlines. I think it also reflects some investor nervousness that the company’s much-enlarged share float reduces the benefit to the shares even if the business does recover fully. Hunting for better options I find some aspects of the investment case for Rolls-Royce persuasive. It has a well-admired engineering expertise and reputation. The aircraft engine market is expensive and difficult to enter, so players like Rolls-Royce have a position of strength. Its installed base of engines virtually guarantees service revenues for years and sometimes decades to come, although a demand shock such as a future pandemic could affect them. In that sense, the company comes close to having the sort of economic moat Warren Buffett appreciates. But the pandemic has shown up some weaknesses in the company’s business model too. It is highly sensitive to demand, which is largely outside its control. Even with budget savings such as the elimination of 7,000 positions last year, the fixed costs of developing and servicing plane engines are high. That is one reason I think the Rolls-Royce share price is still well below its former level, even after the recent increase. Life getting back to normal will improve business prospects for the company. But for pandemic recovery picks I am more attracted by pub operators like J. D. Wetherspoon or transport companies like Go-Ahead. Their structural economics appeal to me more than those of Rolls-Royce, and demand recovery could come faster than it may for the aero engines market. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Tesla has fallen 35%. How I think it affects the Rolls-Royce share price The Rolls-Royce share price: is this best investment for 2021 and beyond? The Rolls-Royce share price is around 110p. Should I buy shares now? Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today The Rolls-Royce share price is rising. Should I buy now? christopherruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post The Rolls-Royce share price is rising. Should I buy shares now? appeared first on The Motley Fool UK.
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  16. Rolls-Royce share price: can it go back up to 200p? (12/03/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) faced big challenges in 2020, and its full-year results released Thursday only confirm that. Interestingly though, the Rolls Royce share price has risen, presumably on the news.  Why the Rolls-Royce share price is up I think the Rolls-Royce share price rose for two reasons.  One, poor results were already priced in. Support services to aviation is the big revenue source for RR. Since travel in 2020 was restricted, RR was bound to feel the impact. The company’s updates have been reflecting this. So have weak trends in the Rolls-Royce share price.  Two, times are changing. The worst of the pandemic now seems to be behind us. And travel is expected to be back soon. Rolls-Royce will be back in business, because of this.  Optimism about this recovery is evident in RR’s outlook. It says “Looking ahead over the next couple of years….we expect the rebound in global GDP and lifting of travel restrictions to drive our recovery”.  According to the International Monetary Fund, global growth will be 5.5% in 2021 after a fall in world output in 2020. It is expected to rise by another 4.2% in 2022.  This can bode well for RR, which expects hours flown by its engines to increase to 80% of the levels seen in 2019 by 2022. This is a big jump in the 55% levels expected for 2021.  Why the RR share price can cross 200p This is somewhat encouraging and I think it can increase RR’s share price further. The Rolls-Royce share price is presently at 115p, which is already an increase of around three times from the lows we saw last year.  I think it may well be possible now that the RR share price can rise back up to its pre-pandemic levels of 200p and above. Besides the improving environment for RR and its outlook, I think there are two other reasons it can happen.  One, other coronavirus and lockdown impacted stocks like Lloyds Bank and Cineworld have recently seen a jump in their share prices back up to pre-pandemic times. For investors still looking for post-market crash bargains, RR is still among them. Two, the US government just passed a massive fiscal stimulus of $1.9trn. If these funds are indeed spent in the manner intended — to improve infrastructure and economic wellbeing that creates higher consumption — we could see a boom in US growth. This in turn, will impact the rest of the world positively. Moreover, it could mean another stock market rally, which could raise share prices across the board, including the Rolls-Royce share price.  A word of caution Much can still go wrong. The pandemic is not over. The threat of coronavirus variants still lurks. Further, RR’s financials are weak and will take their own time to recover. This adds to the fact that RR was in an uncertain place even earlier.  Attractive as the Rolls-Royce share price might look for the near future, I would consider the downside too before making a long-term investment in the stock. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Why Rolls-Royce shares nudged higher today Can the Rolls-Royce share price keep climbing after today’s results? Rolls-Royce earnings: here’s what will help me decide to buy more shares The Rolls-Royce share price is rising. Should I buy shares now? Tesla has fallen 35%. How I think it affects the Rolls-Royce share price Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. 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. The post Rolls-Royce share price: can it go back up to 200p? appeared first on The Motley Fool UK.
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  17. The Rolls-Royce share price has fallen. Is now the time to buy? (10/05/2021 - The Motley Fool UK)
    Shares in Rolls-Royce (LSE: RR) have fallen more than 20% from their high last month. Over the past year, they have dropped dramatically and struggled to recover from March 2020 when the pandemic began, with the Rolls-Royce share price falling as low as 64.86p at the end of October. There has been a strong recovery since then, with the share price back to 109p at the time of writing. Below are some of the reasons why the share price might be down. Reopening prospects mixed Recently, Rolls-Royce shares have tended to do well when there has been more optimism about the world opening up and return to international travel as we used to know it. A large part of the company’s business relies on there being international travel due to its aircraft engine business. The easing of restrictions in the UK has so far been a success and the vaccine rollout is also on track, which is allowing optimism over being able to travel abroad again this summer. However, countries such as India and Kenya have seen a dramatic rise in Covid-19 cases, which may make it harder to travel to these countries in the short term. In my opinion, I expect that travel reopening may not be perfect in the short term but I am optimistic that this form of cash flow for Rolls-Royce should be resuming sooner rather than later. Lack of news Another issue behind the share price of Rolls-Royce is likely to be the fact there has been no important news from the company recently. The lack of news is a possible factor in the share price with no catalyst to get shareholders excited about.  Underlying investment case hasn’t changed From a month ago there has been no real change in the prospects of Rolls-Royce, with the future climate looking the same and global travel still expected to improve and get back to normal. I am bullish on Rolls-Royce and see the drop in the last month as a buying opportunity for investors. With the world starting to open up – and it will do further in the coming months – this is only going to benefit Rolls-Royce. Of course in the short term, things may change but the long term should see the shares in the company increase in value. I am seeing the current price as a great buying opportunity and a great discount to investors. The risk to the share price Many investors will remain wary of Rolls-Royce at the moment and for good reason. The reason for this is the lack of control the company has in its own success at the moment. The success of the company going forward is heavily reliant on the pandemic and restrictions across the UK and the world easing. However, in the long term, the Rolls-Royce share price should recover its recent losses, which is why I am very bullish on the company. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading Hargreaves Lansdown investors are buying Rolls-Royce shares. Should I buy too? How much is the Rolls-Royce share price really worth? Will the Rolls-Royce share price fly this summer holiday season? Can the Rolls-Royce share price bounce back? Will the Rolls-Royce share price soar in May? Ed Jones owns shares in Rolls-Royce. The Motley Fool UK has no position in any of the shares mentioned. 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. The post The Rolls-Royce share price has fallen. Is now the time to buy? appeared first on The Motley Fool UK.
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  18. Tesla has fallen 35%. How I think it affects the Rolls-Royce share price (09/03/2021 - The Motley Fool UK)
    With it having such a large market cap, Tesla’s fortunes affect many other stocks. Given how influential Tesla is, it’s not out of the question that it indirectly affects Rolls-Royce (LSE:RR) too. With Tesla shares declining from around $880 in late January to $563 on 8 March, here’s how I think it affects the Rolls-Royce share price. Tesla & Rolls-Royce  In the past, I think demand for many electric-related stocks increased due to Tesla’s success. Although many electric stocks don’t really have anything in common with Tesla, some in the market probably thought they did (or anticipated the correlation) and bought shares of the companies. The buying somehow caused more buying and many electric stocks rallied when Tesla rallied. Given that air taxi stocks are electric, I reckon they benefited from Tesla’s success as well. This is despite Tesla not being an air taxi stock itself.  I think Rolls-Royce could benefit if air taxi stocks are in high demand (despite Rolls-Royce also not being an air taxi stock itself — yet). If demand for air taxi stocks is strong, air taxi startups could find it easier to raise money. With more money, they could spend more on R&D and potentially bring a product to the mass market faster. If air taxis become market ready faster, demand for air taxi propulsion systems could increase faster. Assuming Rolls-Royce is the leader in air taxi propulsion systems like it wants to be in the future, RR could stand to benefit with more potential growth too.  By that reasoning, Tesla shares falling could indirectly lower demand for air taxi stocks and indirectly negatively affect Rolls-Royce. Is it the case in practice? While the ‘Tesla affects Rolls-Royce’ fundamental reasoning sounds compelling, the Rolls-Royce share price hasn’t really reflected it. While Tesla shares have surged in 2020, for example, RR actually decreased substantially. As a result, I don’t think Tesla falling 35% from its highs actually affects the Rolls-Royce share price all that much. The market, in my view, seems to be more focused on Rolls-Royce’s civil aerospace business rather than its future potential air taxi propulsion business. Civil aviation gets more media attention, and Rolls-Royce’s near-term fundamentals depend a lot more on civil aviation than air taxi propulsion. The Rolls-Royce share price: what I’d do Rolls-Royce has uncertainty. The Rolls-Royce share price might not do well if air travel doesn’t recover like the market expects. Given that it’s a new market, it’s also not clear if Rolls-Royce will succeed in the air taxi propulsion system market like the company has in the traditional jet engine market. The British company will likely have a lot of competition in that category. Nevertheless, I think the market isn’t really reflecting the potential value in Rolls-Royce’s air taxi propulsion business because it’s still in its very early stages. It also hasn’t gotten much press as management hasn’t really advertised it. As the technology progresses, however, I reckon the market perception of the British company’s air taxi propulsion business could increase. Given the business’ potential and the potential for air travel to eventually recover with the vaccine rollouts, I’d buy and hold shares at the current Rolls-Royce share price. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading The Rolls-Royce share price: is this best investment for 2021 and beyond? The Rolls-Royce share price is around 110p. Should I buy shares now? Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today The Rolls-Royce share price is rising. Should I buy now? Will the Rolls-Royce share price recover in 2021? Jay Yao has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Tesla. 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. The post Tesla has fallen 35%. How I think it affects the Rolls-Royce share price appeared first on The Motley Fool UK.
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  19. Rolls-Royce share price: could the company be a Tesla competitor in the future? (10/02/2021 - The Motley Fool UK)
    Could Tesla affect the Rolls-Royce (LSE:RR) share price? Here’s what I think.  Currently, numerous Tesla competitors occupy a strange position in the market. Although they compete against a company with immense resources, many Tesla competitors have high valuations. For many bulls, it seems the thinking is, If Tesla is worth a lot, companies in the same sector as Tesla might be worth a lot too. We’ll have to see whether that thinking proves correct. Given Tesla’s bullish valuation, the market expects Elon Musk’s company to capture a lot of market share in the future. If that happens, many Tesla competitors might not have as much market share themselves. On the other hand, companies with great execution in the future could always beat expectations. Speaking of Tesla competitors, some investors believe Rolls-Royce could become one. Here’s why some think that and what I reckon it could mean for Rolls-Royce share price. Tesla competitor? When people hear the name Rolls-Royce, many think of aviation and aircraft engines. Indeed if Rolls-Royce and Tesla were to compete in a big way, I reckon it could be in the area of electric aircraft such as ‘flying taxis’. Given where emission regulations are going and how battery technology is expected to improve, electric flying taxis will likely be economically competitive one day. Since manufacturing quality aircraft engines is one of Rolls-Royce’s specialities, I think it’s only natural to think the company might enter the market to sell electric engines for those flying taxis in the future. If Rolls-Royce management decides on that path, I reckon the company could also come up with a flying taxi of its own one day. Given Tesla’s has immense financial resources, some investors think the company could also enter the electric aircraft market one day. If Rolls-Royce and Tesla both were to sell electric aircraft at some point, the two would could indeed be meaningful competitors. Whether that ever actually happens, however, is very uncertain. When asked about the potential for electric planes in the near term, Elon Musk said, I think it’s incredibly difficult to bring an aircraft to production and meet all the regulatory requirements worldwide. It’s a very difficult thing… It takes a massive amount of effort to do any one of these things, so you can’t do them all. Given Musk’s comments, perhaps it’s not likely that Tesla will compete in the electric aircraft market in the near future. Nevertheless, the market could be so huge that I believe it could still be a possibility in the long run. How I reckon it could affect the Rolls-Royce share price Because I don’t see Rolls-Royce meaningfully competing against Tesla any time soon, I don’t think the Rolls-Royce share price will benefit from being perceived as a Tesla competitor. Many believe electric planes that carry hundreds of people are decades away. Although electric taxis could become viable sooner, they could still be a quite a number of years off. Nevertheless, I’d still hold Rolls-Royce stock. I think the current Rolls-Royce share price is attractive given the company’s long-term potential in future green fields. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading Should I invest in Rolls-Royce shares now? Why is the Rolls-Royce share price falling? I think the Rolls-Royce share price could benefit from this potential trillion dollar market Why I think the 94p Rolls-Royce share price could double my money Rolls-Royce share price has declined almost 30%. Here’s what I’d do Jay Yao has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Tesla. 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. The post Rolls-Royce share price: could the company be a Tesla competitor in the future? appeared first on The Motley Fool UK.
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  20. The Rolls-Royce share price has fallen. Should I buy? (28/04/2021 - The Motley Fool UK)
    Shares in Rolls-Royce (LSE: RR) have been falling. The Rolls-Royce share price has tumbled 20% from its high last month. Over the past year, the shares have fallen 7%. Below I consider why this might be. I also explain my next move. Reopening prospects mixed Over the past year, the shares have tended to do well when there is optimism about a return to international travel. That is because a large part of the company’s business relies on aircraft engines being used. The more they are used, the greater the demand for servicing. Recently, news about reopening has been mixed. There has been a lifting of some restrictions in the UK, for example. But other markets like India may see fewer flights in the near future. The focus on the timing of broad reopening is important. The sooner flight traffic returns to normal, the sooner the company should be able to staunch its negative cash flow. But I think it is something of a red herring. When assessing the Rolls-Royce share price, I find it helpful to focus on the broad pathway to flight resumption, rather than just a granular calendar view. I expect travel to continue reopening overall even if the progression isn’t smooth. So I am optimistic that Rolls-Royce can return to free cash flow generation. Lack of control Another mitigating factor for the Rolls-Royce share price in my opinion has been the lack of any strong news from the company lately. That reflects the fact that the key drivers for improved performance are external to the company. The directors can’t accelerate the demand for flights, no matter how beneficial that would be for the company. Underlying investment case unchanged Sometimes the stock market generates a lot of noise. Compared to a month ago, I don’t think the future prospects for the Rolls-Royce share price have changed much. The company has not reduced its forecasts. The tough cost controls announced last year continue to take effect. The company still expects to stop bleeding cash in the second half of this year. So if I was bullish about the Rolls-Royce share price prospects, I would see the recent fall as a buying opportunity. I still think the shares could reach 150p this year, as I previously explained. That would be a 45% increase from today’s price in a matter of months. Yet I do not plan to take advantage of the recent share price fall. Why not? Risks to the Rolls-Royce share price The main reason I remain wary of buying Rolls-Royce shares is the lack of control I explained above. Currently the business prospects are mostly hostage to events. That means that even if the company makes its best efforts to prosper, the speed and scale of any recovery is substantially driven by external factors. The main factor is the resumption of flights at close to pre-pandemic levels. While I do expect that to happen at some stage, the timing remains unknown. Delays constitute further risk to the Rolls-Royce share price. I do think the share price could recover its recent losses and more. But for now, I am hunting for other shares that I think are less susceptible to demand shocks. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Rolls-Royce share price: what’s in store in the coming months? As the Rolls-Royce share price falls, I’m still buying Will the Rolls-Royce share price recover in the second half of 2021? Why I think I could double my money with the 100p Rolls-Royce share price The Rolls-Royce share price is crashing in April! Should I buy RR today? christopherruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post The Rolls-Royce share price has fallen. Should I buy? appeared first on The Motley Fool UK.
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  21. Will the Rolls-Royce share price ever get back to 200p? (08/06/2021 - The Motley Fool UK)
    If I look at a list of the most volatile stocks of 2020, Rolls-Royce (LSE:RR) would definitely be on it. From trading at highs just below 700p in February, it traded well below 100p in October. Yet so far in 2021, it has been a completely different story for the Rolls-Royce share price. It has been anchored around the 100p level for several months now. With a lack of any meaningful move higher, will the shares ever break back towards 200p? Last year versus now It’s important to differentiate between this year and last year when analysing the Rolls-Royce share price. The crash and volatility seen in 2020 was because of investors processing a lot of news about the company. It quickly became apparent that with global lockdowns, commercial aviation was going to take a hit. People simply would be unable to travel abroad, meaning passenger flying miles would decrease. This meant less maintenance and new engines were required from Rolls-Royce.  Even though other areas of the business (such as defence) didn’t suffer as badly, the size of the aviation arm of the company meant that the Rolls-Royce share price fell considerably by the end of Q1. The volatility for the rest of the year mirrored the state of the pandemic. Past performance doesn’t perfectly predict future returns, but it does give me some clues. Given that the volatility last year was due to concern by investors, the calm of the past few months tells me that investors are now more neutral. A catalyst for the Rolls-Royce share price? Neutral isn’t really what I’d want though if I held shares in Rolls-Royce right now. I’d be wanting to see it moving higher and trying to head back to 200p or above. The low price today could be a buying opportunity for me, of course. But right now, I don’t have enough information on where the price might go next to warrant me buying the shares, despite that low price.  From one angle, the next move could be higher given the fact that the Rolls-Royce share price has consolidated at current levels for a sustained period. This is a change from the falling price seen for much of 2020. The fact that the price has stopped falling, and is steady, does offer some positivity. From my point of view, to break higher I’d need to see a catalyst. For example, if summer overseas travel restrictions were lifted in the UK, I’d expect the share price to jump. Ultimately, any sign that airline operators will be increasing flights should be positive for Rolls-Royce. Aside from external news like the above, the internal health of the company could drive the Rolls-Royce share price higher. The half-year 2021 results are due out in the first week of August. If cost-cutting measures are on track to save the £1.3bn+ in annual cost savings targeted by the end of 2022, this would be a lift for the shares. More clarity on the restructure (lower capital spend in commercial aviation and more into power systems and defence) could also help. I think the current range around 100p could continue until we get more news out about summer travel plans and half-year results. If both sets of news are positive, then I think momentum could carry the shares to 200p by year end. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Would I buy Rolls-Royce shares or International Consolidated Airlines Group shares? Where will the Rolls-Royce share price go in June? What’s happening to the Rolls-Royce share price? Could the Rolls-Royce share price fall below 100p? This is what I’m doing about the Rolls-Royce share price! jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Will the Rolls-Royce share price ever get back to 200p? appeared first on The Motley Fool UK.
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  22. The Rolls-Royce share price is crashing in April! Should I buy RR today? (21/04/2021 - The Motley Fool UK)
    As a value investor, I love bottom fishing, whereby I trawl through crashed share prices looking for ‘fallen angels’. These are otherwise sound companies whose shares have steeply declined. In March 2020’s market meltdown, dozens of FTSE 100 companies were in this category. So my wife and I invested all of our cash into shares a year ago, with spectacular returns since. But while bargain-hunting in the Footsie today, I spotted an unfamiliar face: Rolls-Royce Holdings (LSE: RR.). Alas, the Rolls-Royce share price has had a bad week (and month). The Rolls-Royce share price crashed in 2020 At its five-year peak, the Rolls-Royce share price topped 375p in August 2018. However, it had a tough 2019, closing the year at 234.45p. Then Covid-19 shut down air travel worldwide and air miles flown collapsed by at least 80%. This destroyed the share prices of airlines and their suppliers, including RR. Thus, the Rolls-Royce share price had a bad time last year. At the low of 2 October 2020, RR shares closed at a mere 38.98p. That’s a loss of over 195p, with the shares crashing by more than 80%. Rolls-Royce rockets from October 2020 Happily, over the past seven months, Rolls shares have soared. From early October, the Rolls-Royce share price staged an almighty comeback. With news arriving after Halloween of several Covid-19 vaccines, RR shares boomed. On 3 December, they closed at 134.90p (up almost 96p), for a whopping 246% gain in just two months. Clever or lucky buyers of RR shares at the October low would then be sitting on almost 3.5 times their money. Wow. Since December, the Rolls-Royce share price has eased back, but rose to close at 127.20p on 17 March. Since then, it’s been on a bit of a downer and, recently, the Rolls-Royce share price has dropped significantly. Over one week, it is down 7.8%, putting it at #99 in the FTSE 100. Over one month, it has dived 15.2%, the worst performance in the Footsie. Ouch. Would I buy Rolls-Royce shares at under £1? This decline brings to mind one of my favourite Ben Graham quotes. The ‘father of value investing’ advised, “A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price”. Do I like Rolls-Royce Holdings as a business? You bet. As a multinational aerospace and defence company around since 1904, it has a storied history. It designs, manufactures, and sells world-class power systems for aviation and other industries. But the collapse in air travel clobbered the Rolls-Royce share price. As I write, it trades at 99.9p on Wednesday afternoon. I would buy big with the Rolls-Royce share price below £1, if not for one worry. In order to survive 2020, RR raised huge sums in bonds and loans, thus bashing its balance sheet. RR’s net debt (including leases) of £3.6bn is approaching half of its market value of £8.4bn. But the company has £3.5bn in cash and £5.5bn in undrawn credit to ride out future storms. Although this debt mountain scares me, I lack any potential growth stocks in my family portfolio. On balance, I’d take a small punt today on Rolls-Royce getting back on track from 2022 onwards! FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Does the Rolls-Royce share price make me want to buy in 2021? 2 ways the Rolls-Royce share price could benefit from the reopening economy Is the Rolls-Royce share price undervalued? Is reopening important for the Rolls-Royce share price? Should I invest in Rolls-Royce or Aston Martin shares right now? Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post The Rolls-Royce share price is crashing in April! Should I buy RR today? appeared first on The Motley Fool UK.
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  23. I’d buy Rolls-Royce shares despite the big 2020 loss (17/03/2021 - The Motley Fool UK)
    I’ve been bullish on Rolls-Royce (LSE: RR) shares for sometime. Last week the FTSE 100 stock released its 2020 full-year results and I can’t say I was too surprised with what the company reported. I think most of the bad news is out in the open for Rolls-Royce shares. And from here, the company and share price are likely to recover so I’d buy the stock. But here’s what I drew from its recent results. Big hit 2020 wasn’t a great year for Rolls-Royce. Revenue and profitability took a big hit. In fact, total sales were down 24% to £11.8bn. The company also suffered a £4bn loss over the year, which included a £1.7bn finance charge. To be honest, I’m not shocked by the big negative numbers. Investors knew Rolls-Royce’s situation was struggling last year and understandably so given the pandemic. It’s no surprise to me that the Civil Aerospace division suffered the worst impact. Rolls-Royce’s largest business took a nose-dive because of Covid-19 travel restrictions. Its revenue just dried up, which was reflected in the results. But I’ll stop with the negative news now and turn to the reasons why I’d buy Rolls-Royce shares. Liquidity Last year, Rolls-Royce took big steps to improve its liquidity position. It raised money through a rights issue and put further credit facilities in place. So at the end of its 2020 financial year, Rolls-Royce had access to a grand total of £9bn in liquidity, including £3.5bn in cash and £5.5bn in undrawn credit. It expects a cash outflow of £2bn in 2021. This is weighted towards the first half of the year before Rolls-Royce expects cash flow to turn positive at some point in the second half of this year. What I take from this is that the company has enough money to weather the storm in the short term. By my calculations, there’s a wiggle room of £7bn in liquidity provided that things continue as expected. Power Systems & Defence divisions The Power Systems and Defence divisions held up well last year. Both businesses accounted for 23% and 29% of Rolls-Royce 2020 full-year revenue respectively. I’ve mentioned this before, but the Defence business provides Rolls-Royce with some revenue stability and visibility. So I’m not surprised, given that revenues took a hit in 2020, that the Defence division accounted for a larger portion of sales. In 2019, this same division only accounted for 20% of revenue. What I think is pleasing to see is that the Defence business has 90% order cover for 2021. The company also predicts steady growth from this division into the medium term. My view Rolls-Royce is highly dependent on the lifting of travel restrictions and the vaccine rollout. Any delays or setbacks mean a further impact to revenue and profitability. This could also place pressure on liquidity and it may need to raise more money, which would be negative for the shares. I recognise that the recovery from the pandemic will take time and I don’t think the dividend will resume any time soon. But I’m still optimistic about the prospects for Rolls-Royce shares. I think the worst is over for the company and hence I’d buy now. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Rolls-Royce share price: 2 reasons why I’d buy after earnings The Rolls-Royce share price is above 100p: what next? Rolls-Royce share price: I think we’ve seen the bottom I’m tempted by the Rolls-Royce share price. Here’s why I’m not buying FTSE 100 stock watch: will the Rolls-Royce share price recover? Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post I’d buy Rolls-Royce shares despite the big 2020 loss appeared first on The Motley Fool UK.
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  24. Rolls-Royce shares: 3 reasons why I’m optimistic for 2021 (17/03/2021 - The Motley Fool UK)
    Rolls-Royce (LSE:RR) shares have enjoyed a decent start to 2021. The share price is up around 15%, over a period when the FTSE 100 index is only up around 3%. This outperformance has coincided with the release of full-year results, the UK vaccination initiative gaining momentum, and other factors. Over a broader one-year period, the share price is still down over 50%, but I think there are several reasons to be more optimistic for 2021. Full-year results The first reason I’m optimistic for Rolls-Royce shares might sound strange. It’s actually relating to the full-year results that came out last week. The loss before tax was £2.9bn, an exceptionally large figure. Even though this figure was well-reported in the news, Rolls-Royce shares traded sideways on the release date.  Normally I’d expect a share price to plummet on such a bad figure, but it got me thinking. Rolls-Royce shares are already heavily down from 2020. Regular trading updates made investors aware of the bad situation within the company. So really, it was no surprise when the final figure came out. In effect, the share price didn’t fall because it was expected. So if I can discount the loss, what else was there to think about? Well the company cut £1bn in costs during the year. It raised £7.3bn in new capital, and expects to generate £2bn from selling off different assets. From that angle, 2021 looks positive.  A second reason I’d look to buy Rolls-Royce shares is the diversification of the business. For a while, I thought of the business only operating in the civil aviation space. Although this is the largest area, it’s not the only one. The results showed that good profits were made from its power systems and defense arms. In fact, the revenues generated from these two areas combined were larger than from civil aerospace. Going forward into 2021, if these areas can continue to grow, and civil aerospace recovers, Rolls-Royce shares could see a strong move higher. The business would be firing on all fronts, something it hasn’t been able to do in the recent past. Sentiment helping Rolls-Royce shares The final reason I like Rolls-Royce shares is the correlation between positivity and the rising share price. When I mean positivity, I’m talking about the sentiment regarding the pandemic. Here in the UK, the vaccination rollout is marching on. In the US, President Biden has also set out an ambitious timeframe to get people vaccinated. The more this continues, the quicker international travel and flying will start again. On balance, there are still reasons to be cautious with the stock. For example, the impact of the pandemic is likely to linger for some time. It’s not as though anyone can click their fingers and restore the billions lost in 2020 overnight. It’s going to be a slow road to recovery, and one that could weigh on Rolls-Royce shares for a while still to come. As a long-term investor, I can look past this. I would look to buy the stock, even with the knowledge that the recovery won’t be overnight. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading I’d buy Rolls-Royce shares despite the big 2020 loss Rolls-Royce share price: 2 reasons why I’d buy after earnings The Rolls-Royce share price is above 100p: what next? Rolls-Royce share price: I think we’ve seen the bottom I’m tempted by the Rolls-Royce share price. Here’s why I’m not buying jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Rolls-Royce shares: 3 reasons why I’m optimistic for 2021 appeared first on The Motley Fool UK.
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  25. The Rolls-Royce share price is rising. Should I buy now? (03/03/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) shares are popular right now. Last week, Rolls-Royce was the fifth most purchased stock on Hargreaves Lansdown. Meanwhile, on Trading 212, RR is currently the 7th most owned stock overall. This interest in the stock appears to be pushing its share price up. Is this a share I should buy for my own portfolio? Let’s take a look at the investment case. Rolls-Royce shares: the bull case I can see why Rolls-Royce shares are popular at the moment. For starters, the share price has been hit hard due to Covid-19 disruption. Over the last year, RR is down about 50%. As a result, the company has a market cap of just £2.2bn right now. If the prospects for the airline industry improve (which I think they will eventually), Rolls-Royce shares could rise. That’s because the company generates a substantial proportion of its revenues from the manufacturing and servicing of engines for the commercial aviation industry. Secondly, there’s been a lot of talk this year about all-electric planes and ‘air taxis’ and some investors believe that Rolls-Royce could be a big player in these areas. Recently, Rolls-Royce has been developing a high-performance electric aeroplane named Spirit of Innovation. This has completed its first runway taxiing tests, ahead of a first flight, which is expected to take place this spring. “This system and the capabilities being developed will help position Rolls-Royce as a technology leader offering power systems to the urban air mobility market,” said Rob Watson, director of Rolls-Royce Electrical, after the tests. This development certainly looks interesting. Going forward, air mobility could be a genuine source of growth for Rolls-Royce. Is RR a good fit for my portfolio? Having said all that, I’m not convinced that Rolls-Royce shares are a great fit for my portfolio at the moment. I like to invest in companies that are consistently profitable, cash generative, financially sound, and that generate a high return on capital employed. In other words, I like high-quality businesses. Companies like Apple, Microsoft, and dotDigital are some good examples. Companies that have these kinds of attributes tend to be good investments over time. Looking at Roll-Royce’s financial track record, it’s not so impressive. In recent years, the company has posted big losses on a number of occasions (well before Covid-19). And even when it was profitable, return on capital employed was not that high. Meanwhile, Stockopedia gives Rolls-Royce an Altman Z1 score of -0.19 which indicates a “serious risk of financial distress” within the next two years. Overall, Rolls-Royce does not appear to me to be a high-quality business. Better stocks to buy In conclusion, I do think Rolls-Royce shares have the potential to keep rising in the short term. If the airline industry picks up, the company should benefit. However, Rolls-Royce is not the kind of stock I’d buy for my portfolio. I think there are much better stocks I could buy right now that are more suited to my goals (generating strong returns over the long term) and risk tolerance. Like this one…. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Will the Rolls-Royce share price recover in 2021? Will the Rolls-Royce share price reach 150p? Rolls-Royce share price: what I’d do given the upcoming full-year result Rolls-Royce shares: is it the right time to buy? The Rolls-Royce share price: have we seen the bottom? Edward Sheldon owns shares in Apple, Microsoft, dotDigital, and Hargreaves Lansdown. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Apple and Microsoft. The Motley Fool UK has recommended dotDigital Group and Hargreaves Lansdown. 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. The post The Rolls-Royce share price is rising. Should I buy now? appeared first on The Motley Fool UK.
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  26. The Rolls-Royce share price holds steady after big 2020 loss. Should I buy? (12/03/2021 - The Motley Fool UK)
    After a torrid 12 months, Rolls-Royce Group (LSE: RR) shareholders might finally have something to look forward to. After reporting an underlying pre-tax loss of almost £4bn for 2020 on Thursday, the aero engine maker told the BBC that “the worst is behind us.” The results didn’t make much difference to the Rolls-Royce share price, which has remained flat. The key thing, for me, is the cash situation. Rolls told us it has strengthened its liquidity to £9bn, with £7.3bn of new debt and equity. I’ve been largely convinced in recent months that this would suffice. And I feel more confident of that now, after hearing that the company is aiming to reach positive free cash flow during the second half of 2021. Rolls also hopes to see the figure reach as high as £750m “as early as 2022.” That has to be very much up in the air right now, though, as so much depends on our lockdown easing progress. I have mixed sentiments myself, and I see that in the market’s approach to the stock over the past few months. The Rolls-Royce share price saw something of a resurgence starting in October, on the back of positive coronavirus vaccine results. But that has eased off a bit and we’ve seen the shares fall back a little. A bad year, but I’d feared worse The implied level of caution is understandable. Even after the late 2020 uptick, we’re still looking at a 38% fall over the past 12 months. And to get the full feel of the pandemic impact, we need to look back to mid-February, which is when the stock market crash kicked off. Since then, Rolls-Royce is down 50%. Rolls-Royce makes its money from service and maintenance contracts for the engines it sells. It’s similar to the old Gillette razor model that Warren Buffett likes so much — sell the razors cheap, and then make the profit on the blades. That can be a profitable strategy during good times, and it has kept the Rolls-Royce share price going for decades. But just as shaving didn’t happen quite so often during lockdown, the same can be said for flying, but more so. With airline fleets close to grounded, engine flying hours in 2020 came in at just 43% of 2019’s figure. That’s tough on the Rolls-Royce business model, but it’s actually not as bad as I’d feared. It resulted in underlying revenue of £11.7bn, down from £15.4bn. And again, I’d been expecting worse than that. But would I buy now? Where will the Rolls-Royce share price go now? Rolls says it’s expecting engine flying hours to recover a bit in 2021, to around 55% of 2019 hours. And the company hopes to be back to 80% in 2022 as a base case. The problem is, the outlook is still so very uncertain. There’s clearly pent-up demand for holidays. But we really don’t know when it will be safe enough to fly, or whether any problematic Covid variants will emerge. I can see a case for the Rolls-Royce share price going either way in the remainder of 2021. And, though Rolls is a company I have long admired, I will wait and see. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Rolls-Royce share price: can it go back up to 200p? Why Rolls-Royce shares nudged higher today Can the Rolls-Royce share price keep climbing after today’s results? Rolls-Royce earnings: here’s what will help me decide to buy more shares The Rolls-Royce share price is rising. Should I buy shares now? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post The Rolls-Royce share price holds steady after big 2020 loss. Should I buy? appeared first on The Motley Fool UK.
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  27. Should I buy Rolls-Royce shares for my portfolio today? (25/03/2021 - The Motley Fool UK)
    It seems that everywhere I look, people are talking about Rolls-Royce (LSE: RR) shares, and so I’m not surprised to see that it is one of the most popular traded companies in the UK right now. Up until mid-March, the Rolls-Royce share price had soared by almost 25%. However, since then the company’s shares have almost given up those gains, falling more than 17% as of market close on March 24. Over the last 12 months, they are down by almost 25% at the time of writing. However, I agree with my Foolish colleague Christopher Ruane that the Rolls-Royce share price will reach 150p this year, but following this dip, should I buy the stock for my portfolio today? Why are Rolls-Royce shares falling? Its share price began declining immediately following its full-year 2020 financial earnings release earlier this month, which revealed that: Total sales fell 24% to £11.8 billion. Total losses accrued to £4 billion. It suffered a £1.7 billion finance charge. I wasn’t too surprised to see that things hadn’t gone very well for the aerospace company. After all, its biggest business segment, Civil Aerospace, took a nosedive thanks to Covid-19-induced travel restrictions. This is still a major risk for Rolls-Royce shares going forward, as there is no guarantee that life will return to normal any time soon (although these two top FTSE stocks that I’m buying before the summer will certainly be relying on such an event). However, with major European markets such as Germany and France reporting rising coronavirus cases in the past month, there is a very real threat to Rolls-Royce’s share price if the situation should deteriorate. Should I buy the stock? I don’t think that Rolls-Royce shares will be able to stage a major comeback this year if lockdown restrictions and vaccination levels don’t go as currently planned, which is far from guaranteed, so I am under no illusions that I am taking a risk by adding it to my portfolio. But I am going to take that risk anyway as Rolls-Royce’s share price continues to fall. Call me an optimist, but I’m still hopeful that widespread reopenings and some return to normalcy will return as 2021 drags on. And, at the end of the day, the company is still one of the world’s leading manufacturers and maintenance providers for aircraft engines — a job that I believe will be in high demand when reopenings come. What excites me in relation to the Rolls-Royce share price is the amount of maintenance that will be required once more planes get back in the air. To put how important this maintenance revenue is for Rolls-Royce into perspective, the company sold £3.2 billion of civil aircraft engines in 2019 but recorded a further £4.9 billion in service revenues for the sector. Even in 2020, with Covid-19 severely limiting flights worldwide, service revenues came in at £2.8 billion. Even taking away the fact that the company’s defense revenue actually grew by 4% to £3.4 billion last year, I expect the Rolls-Royce share price to grow even further when the thousands of currently grounded planes around the world suddenly need inspections before hitting the skies once more. I think that Rolls-Royce shares are a bargain for my portfolio today. as I expect its share price to grow as normality returns.  FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Will the Rolls-Royce share price reach 150p this year? Can management use technology to boost the Rolls-Royce share price? Can the Rolls-Royce share price surge if it overcomes this huge trend? Rolls-Royce shares are nudging higher. Should I buy now? Rolls-Royce shares: 3 reasons why I’m optimistic for 2021 Jamie Adams has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Should I buy Rolls-Royce shares for my portfolio today? appeared first on The Motley Fool UK.
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  28. Rolls-Royce shares: should I buy? (22/02/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) shares have had a lot of attention lately, but the stock has been falling. So if it has taken a hit, is now a buying opportunity? I think so and I’d buy Rolls-Royce shares in my portfolio.  Civil Aerospace I can’t deny that Roll-Royce’s main business, the Civil Aerospace division has been severely hit by the coronavirus pandemic. I think what makes it worse is that revenue from this business accounts for over 50% of the company’s total earnings. But what does the Civil Aerospace division do? In a nutshell, it manufactures and services engines for the airline industry. So it’s no surprise that it has been hit by the pandemic. Global restrictions have meant little travel travel, thereby having a knock-on effect on the need for Rolls-Royce’s services. Now that there’s a mass vaccination programme under way, I expect air travel to start recovering slowly. I reckon there’s pent-up demand for people to holiday abroad. This in turn should start having a positive impact on Rolls-Royce shares. In its December trading update, Rolls-Royce reported that the Civil Aerospace business is gradually recovering. The number of large engine flying hours at the time was 42% of 2019’s level. While no one can predict the shape and timing of the recovery in air traffic, Rolls-Royce expects travel to pick up in the second half of 2021. By this time, I’d expect vaccines to have been rolled out a significant portion of the UK and global population Liquidity During the coronavirus crisis, Rolls-Royce improved its liquidity position. It raised money from a rights issue, and secured additional loans, as well as drawing on its existing cash reserves. Rolls-Royce took further measures by implementing cost-cutting measures and disposing of certain assets. To me, these steps have not only made the firm leaner but have also strengthened the balance sheet. According to its latest update, Rolls-Royce has access to £9bn in liquidity. It forecasts £2bn in cash outflow for 2021. For now, I reckon it can weather the storm and I’d buy the shares. Risks I think the biggest risk right now facing Rolls-Royce share is that no one knows how long this pandemic and restrictions will persist for. If this crisis drags on, this may place a strain on the business and liquidity reserves. Furthermore, if air travel doesn’t pick up in the second half of 2021 then Rolls-Royce may have to raise further capital. Another round of financing may not be well received by investors and could impact the share price. Defence business Clearly, I don’t think all is lost with Roll-Royce shares. I believe investors have become fixated on the company’s Civil Aerospace business and have forgotten that it has other divisions as well. In fact, I’d like to highlight its Defence business, which accounts for 20% of earnings. What I like about Rolls-Royce shares is that the defence business throughout the pandemic has been resilient. The company has defence contracts with the UK and US governments. It also has a strong order book and 2021 forecast sales are well covered. For now, I’m happy with the stable revenue visibility from this division.  “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Rolls-Royce share price: how the company is preparing for the air taxi market The Rolls-Royce share price is back above 100p, but I wouldn’t buy the stock yet The Rolls-Royce share price is rising this week. Should I buy? The Rolls-Royce share price is under £1: should I buy today? What I think Covid-19 variants mean for the Rolls-Royce share price Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Rolls-Royce shares: should I buy? appeared first on The Motley Fool UK.
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  29. The Rolls-Royce share price is above 100p: what next? (16/03/2021 - The Motley Fool UK)
    In the last six months, the Rolls-Royce (LSE: RR) share price has been as low as 40p per share and as high as 140p. Now back above the possibly important psychological marker of 100p, would I add the engineer’s shares to my portfolio? What’s happening with the Rolls-Royce share price? It’s worth noting that although the shares have increased a lot over the last month, over a longer timeframe they’ve performed poorly. In 2018, the shares reached 375p. In early 2014 they were over 400p. Even comparing Rolls-Royce to another engineer like Weir Group or Melrose, shows that its share price has underperformed. Weir and Melrose have made gains over the last 12 months, while Rolls-Royce has lost ground.   That could either mean Rolls-Royce could bounce back stronger, or that there are just greater concerns about the company versus other broadly comparable businesses. I fear it may be the latter. Yet the last month has been a bit stronger. This momentum has, I think, more to do with the rotation to value stocks over growth stocks, rather than specifically a vote of confidence in Rolls-Royce itself. More than just a temporary blip Covid only amplified problems that Rolls-Royce had. It wasn’t firing on all cylinders before the pandemic, as I have pointed out before. There were issues with cash flow and its Trent 100 engines, to give just two examples. Neither of these can easily be ignored, they are pretty major problems.  Even as Covid fades, and we have a roadmap in the UK out of lockdown, there’s still a lot of uncertainty around the engineer. Its wide-body planes will likely be less in demand for now, even as air travel increases. That’s because I’d suspect most people will likely take short breaks until they feel comfortable flying long-haul again. That means lower demand for bigger planes.  The impact of the pandemic will likely hurt its cash flow for years too. This year it’s expected to spend £4.2bn. Turning this situation around will take a lot of management time and require a lot of action, including likely further cost-cutting.  Those issues with the Trent 100 engines are still not fully resolved and have been eating up profits even before the pandemic. It’s hard to quantify what impact this has on the firm’s reputation, but it can’t do the brand any good.  What could help boost the shares? On the flipside of this gloomy picture we have both short-term and long-term opportunities. In the short term, the share price could benefit from being seen as a Covid recovery share. Longer term, reliable defence income and moving into new emerging technologies, such as modular nuclear reactors, could boost growth and investor sentiment. In the end the simple answer to the question of whether I’d add Rolls-Royce shares to my portfolio is probably not. For me there are other Covid recovery stocks that are better value and that could make for more profitable long-term holdings. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Rolls-Royce share price: I think we’ve seen the bottom I’m tempted by the Rolls-Royce share price. Here’s why I’m not buying FTSE 100 stock watch: will the Rolls-Royce share price recover? The Rolls-Royce share price holds steady after big 2020 loss. Should I buy? Rolls-Royce share price: can it go back up to 200p? Andy Ross owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post The Rolls-Royce share price is above 100p: what next? appeared first on The Motley Fool UK.
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  30. The Rolls-Royce share price is under £1: should I buy today? (17/02/2021 - The Motley Fool UK)
    After hitting a high of 135p in early December, shares in aero engine maker Rolls-Royce Holdings (LSE: RR) have slumped due to the impact of renewed lockdown restrictions. Rolls-Royce’s share price has fallen by more than 25% since 3 December, to under 100p. On a 12-month view, Rolls shares have now fallen by nearly 60%. Ouch. Are Rolls-Royce shares a potential bargain? My colleague Graham Chester thinks they might be. I agree. But if I bought the shares today, I’d expect a rough ride before the company returns to reliable profitability. Here’s why. What’s the worst that could happen? I think it’s fair to say that many people underestimated the impact of the coronavirus pandemic. I think most businesses were unprepared too. They had not planned for a scenario where their revenue streams would be shut off by a health emergency and subsequent government action. I’m not here to discuss the politics of this situation. But the reality is that in 2021, Rolls-Royce expects to record engine flying hours that are 45% lower than in 2019. No business can be expected to shrug off such a big loss. Rolls expects to see a cash outflow of £2bn this year, despite cost-saving measures. Can things get worse? Rolls-Royce is banking on a recovery in flying hours during the second half of the year. But I don’t think we can be sure of this just yet. One risk I can see is that countries will return to normal this summer but might keep their borders closed for longer to protect against new virus variants. Why I think the stock could be cheap One challenge for Rolls-Royce is that it doesn’t make much money from selling its jet engines. Profits mostly come from after-sales servicing and support. In normal times, this business generates plenty of cash. This is the key to my belief that Rolls-Royce shares could be cheap at their current price. If I buy the stock, I’ll mentally write off 2021. Anything could happen and I expect the firm’s results to be awful. But from 2022 onwards, I believe the business should be operating pretty much as normal. At that point, I think the changes being made by CEO Warren East should start to deliver results. Rolls-Royce’s own forecasts suggest that it could generate surplus cash each year (known as free cash flow) of £750m “as early as 2022”. I reckon that hitting this target would make the business look cheap at current levels, with a price-to-free cash flow ratio of just 2.5. Rolls-Royce share price: my view I think Rolls-Royce’s valuation reflects a couple of risks for potential shareholders like me. The first is simply that the outlook is still very uncertain. A return to normal is not yet in sight. The second risk is probably more serious, in my view. Rolls-Royce has taken on around £4bn of new debt over the last year to help it survive the pandemic. At some point this borrowed cash will need to be repaid. However, even when I include the impact of Rolls’ increased borrowings, my sums tell me that at a share price of £1, Rolls-Royce could be a good addition to my long-term holdings. I’ve not decided whether to buy Rolls-Royce just yet. But this business is now on my watch list of shares to consider buying. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading What I think Covid-19 variants mean for the Rolls-Royce share price Rolls-Royce share price: why I’d follow the Archer Aviation SPAC Rolls-Royce and Cineworld: are these UK shares too risky to buy now? The Rolls-Royce share price is down 66% this year. Here’s what I’d do now Rolls-Royce share price: could the company be a Tesla competitor in the future? Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post The Rolls-Royce share price is under £1: should I buy today? appeared first on The Motley Fool UK.
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  31. Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today (04/03/2021 - The Motley Fool UK)
    A one-year time frame is a good benchmark when I look at an investment return. It doesn’t mean I’ll sell after one year, but enough time has passed for me to see the general trend of the stock. Judging a company over a shorter time might lead me to make the wrong call on the stock. One example is Rolls-Royce (LSE:RR) shares. One-year performance  A year ago, Rolls-Royce shares were trading at 208p. As I’m writing, the share price is 115p. From this I can clearly see that a £1,000 investment is worth less now than it previously was. In numerical terms, it’s down 45%, so my £1,000 would be worth approximately £550. As a rough barometer, the FTSE 100 index over this period is down as well. However, it’s down less than 3%, so Rolls-Royce shares are underperforming the benchmark. This move lower doesn’t appear to be a one-off. If I look back two years, the share price was at 305p. There have clearly been fundamental drivers that have caused the value of the company to decrease over the past few years.  One of these has been the “tangible and sustainable cultural and performance shift” that was reported in the 2019 results. Rolls-Royce had focused on repositioning the business in several key areas. This meant cutting headcount (seen in both 2019 and 2020) as well as trying to reduce net debt (gross debt reduced by £1.1bn in 2019). This understandably meant Rolls-Royce shares took a knock, as trying to transform a mature company will hurt in the short run before investors see the benefits. Another hit to Rolls-Royce shares came due to Covid-19 last year. The impact was felt in most industries, but particularly in the aerospace sector. Demand for maintenance of engines and new engine sales in the civil aerospace area dried up. Although demand in other areas (such as defence) held firm, Covid-19 definitely took its toll. Should I buy Rolls-Royce shares now? I could look at Rolls-Royce shares and think that the downward trend might continue. However, there comes a point when the share price simply can’t fall lower unless the business is looking like it will go bust.  In its latest trading update, Rolls-Royce confirmed it has £9bn of liquidity available. So I don’t think the business is remotely close to going under in the short term. Therefore, I do see Rolls-Royce shares as an opportunity for me to buy in. But before I do, I’d like to see the full-year 2020 results that are due out on March 11. Besides any major disaster, I’ll buy after results come out. I imagine the commentary with the results will stress caution, but could look ahead with optimism. Based on the vaccination numbers, flying hours should increase in H2, which indirectly will benefit Rolls-Royce. Ultimately, I don’t see air traffic (either civil or otherwise) remaining depressed in the long term. So this should gradually mean a return to sustainable profits for the business. The issue here though is simply the risk of the unknown. If more virus mutations surface or lockdowns are prolonged, Rolls-Royce shares will likely continue to trade lower. However, I can’t predict this, and have to accept this as a risk. But with this in mind, I’d still buy the stock. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Rolls-Royce share price is rising. Should I buy now? Will the Rolls-Royce share price recover in 2021? Will the Rolls-Royce share price reach 150p? Rolls-Royce share price: what I’d do given the upcoming full-year result Rolls-Royce shares: is it the right time to buy? jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today appeared first on The Motley Fool UK.
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  32. Rolls-Royce share price: I think we’ve seen the bottom (14/03/2021 - The Motley Fool UK)
    The Rolls-Royce Holdings (LSE: RR) share price has fallen by 25% over the last year. The stock is still down by 50% from its pre-pandemic levels. I’m not surprised the shares haven’t recovered fully. Rolls’ revenue fell by 37% last year and the group reported a £3.2bn loss. However, CEO Warren East has taken decisive action to raise cash and restructure the business. I expect these efforts to pay off, supporting a strong recovery over time. Now that the future looks more secure, should I buy Rolls-Royce shares? I’ve been taking a fresh look. What I learned from Rolls’ results Rolls’ best-known business is its civil aerospace division, which makes and supports jet engines for airliners. With most airlines grounded for much of last year, flying hours were down by 57%. Revenue from this business fell by 37%, leading to a £2bn operating loss. However, civil aerospace is only one part of this large business. I believe the other parts of the group could help support Rolls-Royce’s share price as the business recovers. The biggest contributor to profits last year was Rolls’ defence division. This business generated an underlying operating profit of £448m in 2020, up by 8% from 2019. Defence activity hasn’t really suffered in the pandemic, providing great stability. Another source of profits was the power systems operation. This makes engines for ships and other industrial markets. Power systems generated an underlying profit of £178m in 2020. Although this was 50% lower than in 2019, Rolls says demand is already recovering. Finally, the ITP Aero business, which makes parts for jet engines, delivered a £68m profit. Rolls-Royce is actually trying to sell ITP Aero at the moment and says it’s in conversations with a number of buyers. I’d guess they’ll be reassured by the ongoing profitability of this business, which is supported by defence revenue as well as civil aviation. Rolls-Royce share price: is it cheap? Although Rolls’ stock is still trading 50% below pre-pandemic levels, I’m not sure how cheap it really is. The reason for this is that the company issued 6.4bn new shares last year when it raised £2bn in a rights issue. This rescue fundraising increased Rolls’ total share count from 1.9bn to 8.3bn. The number of shares issued by a company is important when calculating earnings per share. Even if the total profit is flat, earnings per share will fall if new shares are issued. This is known as dilution. Rolls-Royce reported an underlying profit of £306m in 2019, giving underlying earnings of 15.9p per share. I estimate that earnings would fall to just 3.7p per share if the same profit was generated today. At the time of writing, Rolls-Royce’s share price is 114p. This values the stock at 30 times 2019 earnings, after dilution. Broker forecasts for 2022 suggest that next year’s profits will be at a similar level to 2019. That means the stock is valued on 30 times forecast earnings, too. For me, that isn’t cheap enough. Although I expect Rolls’ profits to rise above this level in the future, I don’t want to pay too much for future growth. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading I’m tempted by the Rolls-Royce share price. Here’s why I’m not buying FTSE 100 stock watch: will the Rolls-Royce share price recover? The Rolls-Royce share price holds steady after big 2020 loss. Should I buy? Rolls-Royce share price: can it go back up to 200p? Why Rolls-Royce shares nudged higher today Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Rolls-Royce share price: I think we’ve seen the bottom appeared first on The Motley Fool UK.
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  33. How much is the Rolls-Royce share price really worth? (08/05/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE: RR) share price has jumped about a fair bit over the past 24 months. In May 2019, the stock was changing hands for just over 300p. However, it steadily declined throughout the rest of the year. By the beginning of 2020, the price of a share in Rolls had fallen to 232p.  Then the coronavirus pandemic began. Rolls was disproportionately affected as the crisis brought the global aviation industry to its knees. The stock plunged below 100p in April 2020 and fell to a low of 39p in October.  Since then, investor sentiment has steadily recovered. The Rolls-Royce share price returned to 130p in December 2020 as it looked as if the world was beginning to move on from the pandemic. Then the second wave struck. While the stock never returned to the low of October 2020, it dropped significantly, falling around 40% from the beginning of December to the end of January 2021.  Trying to value the Rolls-Royce share price  I think this volatility shows just how hard it has been for the market to understand how much Rolls is worth right now. The company is battling numerous headwinds, and its outlook is far from clear. So trying to value the business at this point is incredibly difficult.  That being said, while past performance should never be used as a guide to future potential, we can look at the company’s historical revenues and profits to try and estimate how much the stock could be worth in the best-case scenario. In 2019, the group’s revenues totalled £16.6bn. Throughout much of that year, the company’s market capitalisation was around £18bn. That suggests a market capitalisation-to-sales ratio of 1.1.  This gives me some guidance as to how much the Rolls-Royce share price could be worth. If revenues return to 2019 levels, the company’s market value could rise back to £18bn. Today it is £8.8bn.  Rough valuation  Of course, this is only a rough, back-of-the-envelope projection. I’ve used sales figures because the company has lost money in four of the past six years. This makes it very difficult for me to place a value on the business based on profitability alone. It also reduces the chances that the stock will ever return to previous highs. As long as Rolls continues to lose money, I think investor sentiment towards the business will remain week. There’s always going to be a question as to whether or not the company will be able to sustain its losses.  Still, management has stated that the enterprise is aiming to become free cash flow positive next year. If the company can hit this target, it will remove some of the pressure from its balance sheet. However, I should note that the group has missed management growth projections in the past. That’s something investors should keep in mind.  Overall, it isn’t easy today for me to say how much the Rolls-Royce share price is worth. Nevertheless, I would buy a small amount of the stock for my portfolio today as a recovery play.  CEO’s £500,000,000 Stake on Industry’s “Uber” Revolution We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading Will the Rolls-Royce share price fly this summer holiday season? Can the Rolls-Royce share price bounce back? Will the Rolls-Royce share price soar in May? FTSE 100 shares: 3 I’m considering for my ISA The Rolls-Royce share price is falling: should I buy now? Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post How much is the Rolls-Royce share price really worth? appeared first on The Motley Fool UK.
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  34. Would I buy Rolls-Royce shares or International Consolidated Airlines Group shares? (03/06/2021 - The Motley Fool UK)
    That aviation is going through an awful time right now is an understatement. The upswing has started for most other segments of the economy, but we are still waiting for air travel to restart in earnest.  Not all aviation stocks are made equal There are better days ahead in store though, I feel. And some aviation stocks have already run-up significantly in anticipation of better times.  Low-cost airline Wizz Air, for instance, was recently at all-time-highs. RyanAir, another low-cost carrier, saw its share price rise to three-year highs. easyJet has also seen significant gains over the past year. Yet the speedy share price rise for these stocks combined with the expected slow healing of their financial health makes me doubtful if they can rise more in the near future.  But there are two stocks in aviation I see as having much potential. One is British Airways owner International Consolidated Airlines Group (LSE: IAG) and the other is aircraft engines’ provider Rolls-Royce (LSE: RR). They stand out for how little they have gained since last year’s market crash. IAG’s share price is actually lower than it was at the same time last year and the Rolls-Royce share price is almost at the same level. Rolls-Royce or IAG – which is the better buy? This could be a good opportunity to buy for me. But I do not want to expose myself a whole lot to aviation yet. So, I would like to buy shares of either IAG or Rolls-Royce, not both.  The question now is: which one of them is a better investment for me? Three ways to assess To assess this, I compared them across three parameters. One, their share price trends before the market crash. Two, their financial performances pre-pandemic. And three, their own outlooks for the rest of the year. In understanding their share price performances, I considered the five-year period between early 2015 and early 2020. Turns out that both their share prices have dropped over this time, albeit with much fluctuation during the interim.  In terms of financial performance, IAG is ahead of Rolls-Royce. IAG showed steady growth in revenue and was also profitable in the three years before the pandemic. Rolls-Royce too saw growth in revenue, but it was loss-making for two of the three years. And now it has had another bad year.  The outlook for both companies has improved, with some caution of course. But I think Rolls-Royce may be better placed even if aviation recovery is slow. Besides civil aerospace, power systems and defence systems are important sources of revenue for it. And it is optimistic about their recovery.  If, however, air travel restarts as planned, IAG can start recovering too. It does mention a “high level” of pent-up demand in its latest update.  My takeaway Based on this assessment, I lean towards IAG, largely because of its past performance. However, I will wait for another month to see how air travel picks up. That should indicate better which of the two is better placed. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading Cheap UK stocks: should I be buying airline shares ahead of the summer? Where will the Rolls-Royce share price go in June? What’s happening to the Rolls-Royce share price? Could the Rolls-Royce share price fall below 100p? Should I Invest in IAG shares right now? Manika Premsingh owns shares of easyJet. The Motley Fool UK has recommended Wizz Air Holdings. 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. The post Would I buy Rolls-Royce shares or International Consolidated Airlines Group shares? appeared first on The Motley Fool UK.
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  35. As the Rolls-Royce share price falls, I’m still buying (24/04/2021 - The Motley Fool UK)
    Since hitting a post-Covid-crash high of 135p in December of last year, the Roll-Royce (LSE: RR) share price has been under pressure. The stock has fallen around 25% since it reached this level. The sell-off accelerated last week, with the stock falling around 6%. Over the past 12 months as a whole, the Rolls-Royce share price has fallen 8%. It’s down 56% over the past five years.  However, I think the recent declines in the share price could be an opportunity for long-term investors.  Overcoming challenges  I think the market has got it wrong here. Shares in the aerospace business have been falling in 2021, but the group’s outlook is only improving. Compared to this time last year, Rolls’ outlook is entirely different. The company seems to have pulled through the worst of the crisis, the airline industry is back in the air, and the group has shored up its balance sheet.  Granted, the business still faces some severe headwinds. Its latest trading updated predicted a free cash outflow in the “region of £2bn in 2021.” That’s money flooding out of the business management will have to find from somewhere. The group highlighted its £9bn of liquidity in the same update, which should help it cover the cash outflow. If there’s another more severe coronavirus wave, Rolls will face more losses. It’s unclear if the business could weather another two years of billions of pounds of cash losses. Rolls-Royce share price opportunity  These are the main risks and challenges facing the Rolls-Royce share price. But the company’s long-term potential is encouraging. The corporation believes it can generate £750m of free cash flow by 2022. This projection is “based on 2021 widebody engine flying hours at around 55% of 2019 levels.”  A positive free cash flow would put the business back on a sustainable footing and remove the need for further cash calls.  How likely is it Rolls will meet this target? I think there’s a 50/50 chance. On the one hand, the pandemic is still raging in Asia, and it seems unlikely this will change anytime soon. On the other, over in the US, the aviation business is booming. Some airlines are even hiring new pilots.  As such, it seems to me that the Rolls-Royce share price is a high-risk investment. Yes, the stock has potential, but many risks on the horizon could cause turbulence for the firm.  Nevertheless, it seems clear to me the stock isn’t reflecting the company’s improving fundamentals. As long as there’s no Covid resurgence and the aviation industry continues to recover, I think Rolls’ fundamentals will continue to improve. Therefore, I’d buy the stock for my portfolio today as a recovery play. Although I’d keep the risks surrounding the Rolls-Royce share price in mind and re-evaluate my position if things change.  One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Will the Rolls-Royce share price recover in the second half of 2021? Why I think I could double my money with the 100p Rolls-Royce share price The Rolls-Royce share price is crashing in April! Should I buy RR today? Does the Rolls-Royce share price make me want to buy in 2021? 2 ways the Rolls-Royce share price could benefit from the reopening economy Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post As the Rolls-Royce share price falls, I’m still buying appeared first on The Motley Fool UK.
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  36. Rolls-Royce share price: what I’d do given the upcoming full-year result (25/02/2021 - The Motley Fool UK)
    Although shares are still down by around half over the last 12 months, Rolls-Royce (LSE:RR) shares have rallied recently. As of 24 February, the Rolls-Royce share price is up over 9% over the last week and 14% over the last month. Given that the aerospace engine maker reports its 2020 full-year results on 11 March, the Rolls-Royce share price could have further moves ahead of it. If the results and guidance are better than expected, shares could go higher. If they don’t meet expectations, shares could decline. With the upcoming full-year result, here’s what I’d do. The upcoming full-year result In terms of Rolls-Royce’s upcoming full-year result, I’ll look for several things. First, I’d look to see if management updates widebody engine flying hours guidance. Civil aviation is a big part of the company’s business and weakness in the area is one reason why management forecasted a free cash flow outflow of around £2bn in 2021. That amount of expected free cash outflow didn’t meet many analyst estimates. If guidance for wide-body engine flying hours is stronger than expected during the full-year result, however, I reckon the Rolls-Royce share price could rise. Second, I’ll look to see if management updated cash flow guidance. Specifically, I want to see if management is more confident on their free cash flow target for next year. As of late January, management seemed to be hedging somewhat on their target, as they said their goal is “to deliver at least £750 million of free cash flow (excluding disposals) as early as 2022, contingent on the expected recovery in engine flying hours”. If management doesn’t say the contingent part in the full year result report, I’ll be more optimistic on the stock. I’ll also look for any hints of how the ITP Aero sale process is going. If management gets a higher than expected price for ITP Aero, I reckon there is a chance that the market could value Rolls-Royce’s other assets higher too. If that occurs, I think it could help the Rolls-Royce share price. Lastly, I’m been keen to see if management gives any updates on their green strategy. For various reasons whether deserved or not, the market is currently pretty optimistic on many green stocks. If that optimism continues and Rolls-Royce successfully sells itself as more of a green stock itself, I reckon there’s potential for higher stock prices. The Rolls-Royce share price: what I’d do I’d buy and hold shares given the current Rolls-Royce share price. Although it might take longer than expected due to the spread of Covid-19 variants, I nevertheless think a recovery in civil aviation will happen. Companies like GlaxoSmithKline are working on potential vaccine candidates for variants that might be ready as soon as next year and the number of existing new cases is falling in many areas of the world. Longer term, I think Rolls-Royce has potential to add a lot of value by servicing propulsion systems for the electric air taxi market. With this said, Rolls-Royce shares could decline if its full-year results don’t meet expectations. If the time to civil aviation recovery lasts longer than expected or if management makes bad capital allocation decisions, the stock might not do well. The high-calibre small-cap stock flying under the City’s radar Adventurous investors like you won’t want to miss out on what could be a truly astonishing opportunity… You see, over the past three years, this AIM-listed company has been quietly powering ahead… rewarding its shareholders with generous share price growth thanks to a carefully orchestrated ‘buy and build’ strategy. And with a first-class management team at the helm, a proven, well-executed business model, plus market-leading positions in high-margin, niche products… our analysts believe there’s still plenty more potential growth in the pipeline. Here’s your chance to discover exactly what has got our Motley Fool UK investment team all hot-under-the-collar about this tiny £350+ million enterprise… inside a specially prepared free investment report. But here’s the really exciting part… right now, we believe many UK investors have quite simply never heard of this company before! Click here to claim your copy of this special investment report — and we’ll tell you the name of this Top Small-Cap Stock… free of charge! More reading Rolls-Royce shares: is it the right time to buy? The Rolls-Royce share price: have we seen the bottom? Rolls-Royce share price is around 100p. Here’s what I’d do Rolls-Royce shares: should I buy? Rolls-Royce share price: how the company is preparing for the air taxi market Jay Yao has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. 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. The post Rolls-Royce share price: what I’d do given the upcoming full-year result appeared first on The Motley Fool UK.
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  37. Will the Rolls-Royce share price soar in May? (02/05/2021 - The Motley Fool UK)
    I can’t resist an interesting turnaround stock. Right now, they don’t get much bigger or more interesting than Rolls-Royce (LSE: RR), whose share price has doubled since October. Unfortunately, the aero engine maker’s performance hasn’t been so good over longer periods. Rolls-Royce stock is flat on a year ago, and down by 60% over three years. With a return to normal now on the cards in many parts of the world, should I consider buying some Rolls-Royce shares for my Stocks & Shares ISA? A turning point? Rolls-Royce sells jet engines for airliners, but it makes most of its profits from aftersales maintenance and support services. When aircraft are grounded, airlines don’t need these services because the engines aren’t in use. However, that situation is starting to change. Aero engineer Meggitt reports that domestic flying in markets such as the US and China has already rebounded strongly. Here in the UK, the government is expected to start lifting restrictions on travel to Europe in May. It’s all good news. The only catch is that most of the routes opening up now are short-haul flights. Rolls-Royce engines are generally fitted to larger wide-body aircraft that are reserved for long-haul routes. Rolls-Royce isn’t expected to return to profit until 2022. But the stock market always looks forward and I think we’re at a turning point. In my view, the outlook for Rolls-Royce will start to improve during the second half of this year. What if we stop flying? Rightly or wrongly, I don’t think environmental concerns will stop people returning to the air. Video conferencing is useful, but it’s no substitute for face-to-face business meetings with new people. Likewise, you can’t lie on the beach or visit foreign cities on Zoom. For these reasons, I believe Rolls-Royce will see a gradual return to normal over the next couple of years. The pandemic has been painful for this FTSE 100 stalwart. But I think the changes made over the last year are likely to support stronger profits in the future. The only concern I have about buying Rolls-Royce shares now is whether the price is right. Rolls-Royce share price: too high or too low? All the most successful investments I’ve made have had one thing in common. I’ve bought the shares at the right price. So how does Rolls-Royce stack up today? On a short-term view, Rolls-Royce still looks fully priced to me. Broker forecasts suggest earnings of 4p per share in 2022. This prices the stock on 25 times forecast earnings. However, earnings are expected to rise to 7.2p per share in 2023, which values Rolls on a more modest 14 times forecast earnings. I can also see another attraction. The company hopes to start generating free cash flow (surplus cash) from its operations during the second half of 2021. CEO Warren East is targeting annual free cash flow of £750m in 2022, or soon after. I reckon this will be enough to allow the group to start paying back some of the loans it’s used to survive the pandemic. To be honest, I don’t know whether the Rolls stock will rise in May. But, on a longer-term view, I’d be comfortable buying Rolls-Royce while the share price is around 100p. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading FTSE 100 shares: 3 I’m considering for my ISA The Rolls-Royce share price is falling: should I buy now? The Rolls-Royce share price has fallen. Should I buy? Rolls-Royce share price: what’s in store in the coming months? As the Rolls-Royce share price falls, I’m still buying Roland Head has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Zoom Video Communications. The Motley Fool UK has recommended Meggitt. 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. The post Will the Rolls-Royce share price soar in May? appeared first on The Motley Fool UK.
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  38. Will the Rolls-Royce share price reach 150p? (27/02/2021 - The Motley Fool UK)
    With an army of shareholders, the Rolls-Royce (LSE: RR) share price is a matter of great interest for many people. After aviation demand fell sharply last year, the aerospace engineer has faced very challenging market conditions. Some investors think a recovery in demand will help boost the Crewe group’s fortunes and boost the share price. Here’s my take. Travel demand will come back A lot of the company’s revenue comes from selling and servicing engines. Aviation regulations mean that engines need certain levels of service for every number of hours they spend flying. So, an aviation downturn hurts companies like Rolls-Royce not just because the order book for new engine sales can get thinner. A fall off in travel also leads to lower demand from aircraft operators for servicing. I take the view that travel demand will come back after the pandemic. Sooner or later, people will want to fly for leisure again and business travel will return in some form. What is not obvious is how fast that recovery will be. That will affect the Rolls-Royce share price. That is important when considering the investment case for Rolls-Royce. It has been ruthless in cutting costs, reducing 7,000 jobs last year. Nonetheless, an engineering company has high fixed costs and needs to invest in research and development for future growth. The longer it takes for air travel demand to recover, the longer it will be before business gets back to normal. Currently, the aerospace specialist is burning cash. It expects cash burn of around £2bn this year, on top of a larger number last year. That is so even though it expects to turn cash flow positive in the second half of the year. The company’s engines are built to withstand strong headwinds – and so are its finances. It has around £9bn of liquidity after raising cash last year. If it needed to, I expect it could raise more. Nonetheless, the sooner travel demand recovers, the sooner I would expect the Rolls-Royce share price to do the same. The Rolls-Royce share price is sensitive to bad news The company has changed its forecast of likely aircraft utilisation this year. It still forecasts a figure for larger planes of around 55%, and 90% for next year. If those figures eventuate and the company hits its target of turning cash flow positive this year, I expect investor sentiment towards the shares could improve. That could push the shares towards 150p. However, for now it is unclear whether air travel will indeed return at that rate and on those timings. After all, many countries have not yet begun their vaccination programmes. Additionally, behavioural shifts such as the use of online meetings for some types of business may have led to structural shifts in demand for air travel. The Rolls-Royce share price has continued to disappoint. Not only has there been the massive loss during the pandemic, but last year the shares were also heavily diluted as part of the company’s efforts to improve liquidity. More bad news, like a slower-than-expected return of air traffic, could further hurt the shares. Whether they hit 150p relies on a big unknown, in my view. I like investing in companies with clearer routes to sustained profitability. That’s why I am not selecting Rolls-Royce for my portfolio. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Rolls-Royce share price: what I’d do given the upcoming full-year result Rolls-Royce shares: is it the right time to buy? The Rolls-Royce share price: have we seen the bottom? Rolls-Royce share price is around 100p. Here’s what I’d do Rolls-Royce shares: should I buy? christopherruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Will the Rolls-Royce share price reach 150p? appeared first on The Motley Fool UK.
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  39. Rolls-Royce share price: why I’d follow the Archer Aviation SPAC (15/02/2021 - The Motley Fool UK)
    When most people hear the name Rolls-Royce (LSE:RR), they think of Rolls-Royce Motors and the ultra luxury vehicles. Yet Rolls-Royce doesn’t own the Rolls-Royce Motors brand name. Bayerische Motoren Werke (BMW) does. Rather than the car market, what’s actually more relevant to the Rolls-Royce share price is the aviation market. In pre-pandemic 2019, for example, RR’s civil aerospace division alone accounted for 51% of its underlying sales. When the aviation market didn’t do well last year due to the pandemic, the company’s fundamentals significantly worsened. Due to the headwinds in civil aviation and other factors, the Rolls-Royce share price has fallen over 60% in the last 12 months when taking into account the rights issue last year. Given the aircraft industry’s importance to Rolls-Royce, here’s why I’d follow electric aircraft startup Archer Aviation, and its associated special purpose acquisition company (SPAC). What’s Archer Aviation? I think Archer Aviation’s success could have an effect on the Rolls-Royce share price. Here’s more on Archer. Archer Aviation is an electric aircraft startup. According to the company’s website, Archer Aviation is working on an electric vertical take-off and landing aircraft that the company hopes will travel up to 150 miles per hour for a distance of up to 60 miles. The company has some traction. According to MarketWatch, Archer Aviation won a $1bn order from United Airline Holdings for its potential products, with the airline having an option to purchase $500m more. Archer Aviation could be targeting a big trend, as the electric air mobility market could be huge in the future. Time is money for a lot of people, and flying taxis could save a lot of time in some commutes by avoiding congestion. Furthermore, electric aircraft typically emit less carbon dioxide than normal aircraft and thus are a more sustainable transportation solution. Recently, Archer agreed to go public through a SPAC. Specifically, a SPAC named Atlas Crest Investment Corp merged with Archer Aviation in a deal that is expected to close in the second quarter of this year. So far the market reaction to the Archer Aviation SPAC has been positive, as the stock of Atlas Crest Investment Corp has surged over 30% since its IPO. Why I think Archer could matter for the Rolls-Royce share price Given the Rolls-Royce share price hasn’t done very well over the last 12 months, I think the company could use some good headlines for once. Although Archer isn’t directly related to Rolls-Royce, Archer is in Rolls-Royce’s industry. If the Archer SPAC’s valuation outperforms, I think it could help RR. If Archer and its SPAC is worth a lot, I reckon some investors could view Rolls-Royce’s electric growth potential in a more positive light. That could potentially help market sentiment. If the market sends the Archer SPAC stock substantially higher, I think the success could shift some attention away from RR’s weak civil aviation business and more towards the company’s more promising green divisions and opportunities. Given the company’s potential in future green fields such as electric planes, I’d hold Rolls-Royce shares. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading Rolls-Royce and Cineworld: are these UK shares too risky to buy now? The Rolls-Royce share price is down 66% this year. Here’s what I’d do now Rolls-Royce share price: could the company be a Tesla competitor in the future? Should I invest in Rolls-Royce shares now? Why is the Rolls-Royce share price falling? Jay Yao has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Rolls-Royce share price: why I’d follow the Archer Aviation SPAC appeared first on The Motley Fool UK.
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  40. Will the Rolls-Royce share price fly this summer holiday season? (06/05/2021 - The Motley Fool UK)
    The euphoria surrounding last year’s Rolls-Royce Holdings (LSE: RR) share price revival has faded as investors take a more realistic view of its prospects. Incredibly, its stock quadrupled between October and December last year, and investors who bought at the right time will have made a fortune. Sadly, I wasn’t one of them. Despite a second wind in February, the Rolls Royce share price trades at the same level as this time last year, and is down two-thirds measured over three years. More investors will have lost big money on this FTSE 100 stock than made it. The aircraft engine manufacturer generates most of its revenues from maintenance and service contracts. These are based on miles flown and they collapsed as Covid grounded global fleets. Management has adopted the usual measures facing troubled companies, including rescue packages, non-core asset sales, laying off staff, restructuring, scrapping dividends and so on. FTSE 100 pandemic victim Yet it can only do so much to cut costs and prop up the Rolls-Royce share price. Ultimately, it needs customers to start flying their planes again. I fear this year’s summer holiday season may prove another washout, as governments remain reluctant to risk a Covid resurgence by freeing people to travel in large numbers. Vaccination passports may help, but will people fly with the same alacrity as before? Many will recoil at the thought of sitting in a crowded plane with strangers, followed by hours queuing at passport control after all the social distancing campaigns we’ve been through. And if Covid continues to ravage parts of Asia and Latin America, many countries look set to remain off-limits for some time to come. There’s some good news as the US and China resume domestic flights, but the international long-haul market will take even longer to put right. This is where Rolls-Royce has most of its market. The Rolls-Royce share price may fly low for a while In March, Rolls-Royce reported a worse-than-expected £4bn annual loss but stood by predictions that cash would start flowing again in the second half of this year.  I might be too pessimistic here. We could see a Rolls-Royce share price revival. Vaccines are working. Flight activity has to pick up from here, albeit slowly. Defence sales are up. The group’s Power Systems and ITP units look promising. Investors may decide it has been oversold. I find the stock hard to judge, though, as I cannot assess the Rolls-Royce share price using traditional measures such as the P/E ratio, operating margins, and return on capital employed. And there’s no dividend while I wait for management to turn this crate around. Rolls-Royce is barred from returning cash to shareholders before the end of next year, at the earliest. One figure does jump out. Rolls-Royce has £7.3bn of loan obligations. So I don’t think its share price is cheap enough to count as a bargain. In fact, it looks like a risky way to play the post-Covid recovery. It’s not for me. There are much more promising stocks out there. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Can the Rolls-Royce share price bounce back? Will the Rolls-Royce share price soar in May? FTSE 100 shares: 3 I’m considering for my ISA The Rolls-Royce share price is falling: should I buy now? The Rolls-Royce share price has fallen. Should I buy? Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Will the Rolls-Royce share price fly this summer holiday season? appeared first on The Motley Fool UK.
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  41. Rolls-Royce share price: how the company is preparing for the air taxi market (21/02/2021 - The Motley Fool UK)
    It’s pretty clear that Rolls-Royce (LSE:RR) will face some tough challenges in the next few years. Although many countries are rolling out vaccines against Covid-19, civil aviation hasn’t recovered all that much. As a result of these headwinds and previous management decisions, the Rolls-Royce share price hasn’t done well over the past 12 months when adjusting for the rights issuance — the stock is down around 59%. While the next few years might be challenging, I reckon there is still an opportunity for Rolls-Royce if management makes the right decisions, particularly in the field of electric air taxis. Here’s how Rolls-Royce is preparing for the market and how I think it could affect the Rolls-Royce share price. What are air taxis Air taxis are electric vertical take-off and landing (eVTOL) aircraft. While they were previously in the arena of science fiction, rapid improvements in battery technology have made air taxis more practical. A startup such as Archer Aviation is, in fact, hoping to produce air taxis with a range of 60 miles and a top speed of 150 miles per hour by 2023. Other startups and companies are also working on air taxi technology. Given that air taxis could save a lot of time in terms of commutes, many analysts think the market could be pretty big in the future. Airbus, for example, believes the eVTOL aircraft market could one day outpace its current business. Air taxis also fit into the green trend. Because they are electric, air taxis would also represent a more sustainable form of transportation than traditional jets that use fossil fuels. Rolls-Royce and air taxis For Rolls-Royce, air taxis are a potential growth field, and the company is already doing work in the sector. In collaboration with Airbus, Rolls-Royce has developed a propulsion system for an electric multicopter named CityAirbus with a maximum speed of 75 miles per hour. Going forward, Rolls-Royce believes distributed electric and hybrid electric propulsion technology will be important for electric taxis in the future. The company is working on developing the tech as a result. Rolls-Royce shared its projection on electric propulsion and the potential growth in air taxis:  Enabled by distributed electric propulsion, these vehicles will soar over traffic in a way that every commuter dreams about – and they could be in the skies by the early 2020s. The projected market size for these early eVTOL is roughly £1bn per year. As battery technology improves over the years, air taxis and eVTOL will become more sustainable and fly for longer ranges and at higher speeds. Rolls-Royce share price: what I’d do Although its fundamentals might not be that great from a near-term cash flow perspective, I reckon Rolls-Royce has a lot of potential in future aviation technologies given its leading R&D capabilities in aircraft engines. If management makes the right moves in the air taxi engine market, Rolls-Royce has a lot of growth potential ahead in my view. Given the current Rolls-Royce share price, I’d buy shares as a result. With that said, the next couple years will likely be challenging for Rolls-Royce and any bad management decisions could send the stock lower. If another company does better in distributed electric and hybrid electric propulsion technology, there might not be as much growth for Rolls-Royce either. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading The Rolls-Royce share price is back above 100p, but I wouldn’t buy the stock yet The Rolls-Royce share price is rising this week. Should I buy? The Rolls-Royce share price is under £1: should I buy today? What I think Covid-19 variants mean for the Rolls-Royce share price Rolls-Royce share price: why I’d follow the Archer Aviation SPAC Jay Yao has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Rolls-Royce share price: how the company is preparing for the air taxi market appeared first on The Motley Fool UK.
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  42. Can the Rolls-Royce share price bounce back? (05/05/2021 - The Motley Fool UK)
    2020 was a rough year for the Rolls-Royce (LSE:RR) share price. After crashing by nearly 50% in March, the stock continued its downward trajectory until early October. The business serves multiple industries. But around half of its income comes from the sale and maintenance of aircraft engines. When travel restrictions prevented planes from taking off, a large portion of its revenue stream evaporated. So seeing the stock collapse is not that surprising to me. But is that all about to change? And should I be adding this business to my portfolio? The recovery starts In October last year, the Rolls-Royce share price reached its lowest point since 2003. But since then, it’s been on the rise. In fact, it’s up by around 165% over the last seven months. What’s causing this growth? The business managed to secure a £5bn rescue package that brought it back from the brink of bankruptcy. Meanwhile, with the vaccine rollout progressing relatively quickly, it looks like the airline sector is finally starting to take off again. Here in the UK, holiday travel is on track to return later this month. And domestic flights in the US and China are already increasing. This is undoubtedly good news for Rolls-Royce, and so seeing its share price rise as more planes return to the sky is understandable. It’s worth remembering that initially, the majority of resumed flights are likely to be short-haul, and the firm’s engines are generally used on long-haul aircraft. So it may take a while longer before Rolls-Royce sees its revenue making a complete recovery. But based on current forecasts, it is expected to return to profitability by 2022. And with the worst seemingly over, it looks like a potential turning point for the business. The risks that lie ahead The return of travel is an encouraging sign. But even after the pandemic comes to an end, Rolls-Royce will still have many challenges to overcome, the first of which is its debt. As it stands, it has around £7.3bn of loan obligations on its balance sheet. That racks up a pretty expensive interest bill, and with no operating profits at this time, the firm is having to burn through cash to keep up with payments. Needless to say, over the long term, this is unsustainable. And if it’s not able to return to profitability in 2022 as planned, I think it’s likely that the company will need to raise additional capital. Naturally, this will likely hurt the Rolls-Royce share price. The management team has announced its intentions to dispose of non-core assets to build up its cash balance. However, its latest attempt to sell its Bergen Engines subsidiary failed after the Norwegian government blocked the transaction out of national security concerns. And with the currently weak market sentiment, it could take some time before another buyer is found. The bottom line The return of international travel does make me cautiously optimistic about the Rolls-Royce share price. However, I think its recovery will be a multi-year process, during which many things could go wrong. Personally, I don’t believe the risk is worth the potential reward, especially since there are other more promising investment opportunities available today. I won’t be adding this stock to my portfolio. But there is another stock I’ve got my eye on because… “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Will the Rolls-Royce share price soar in May? FTSE 100 shares: 3 I’m considering for my ISA The Rolls-Royce share price is falling: should I buy now? The Rolls-Royce share price has fallen. Should I buy? Rolls-Royce share price: what’s in store in the coming months? Zaven Boyrazian does not own shares in Rolls-Royce. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Can the Rolls-Royce share price bounce back? appeared first on The Motley Fool UK.
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  43. I think the Rolls-Royce share price could benefit from this potential trillion dollar market (09/02/2021 - The Motley Fool UK)
    Just as electric motors have disrupted traditional internal combustion engine cars, I think there will come a time when electric jets replace current jets. With improving battery technology, the technology for electric planes is becoming more practical. Given the trend, here’s why I think Rolls-Royce (LSE:RR) and the Rolls-Royce share price could benefit from going electric. Reducing carbon emissions in the industry I think the Rolls-Royce share price is intriguing given a particular emerging sector.  As an industry, aviation accounts for more than 2% of greenhouse gas emissions, and that amount could grow as more people fly. Cutting down aircraft emissions would be one of the methods to help achieve ambitious carbon emission targets by the middle of this century. Given the current state of battery technology, the electric plane industry is still in its very early stages. There is still a lot of technology that needs to be developed in order for electric planes to be lightweight, safe, and durable enough to be used commercially. Many experts reckon it could take decades before electric airplanes that carry hundreds of people can fully replace kerosene ones. With battery tech improving in terms of efficiency and cost, however, electric planes look more and more practical at some point in the future. Rolls-Royce, in particular, has worked in a collaboration on the world’s fastest electric plane, which is capable of going more than 300 miles per hour. According to past releases, the electric plane is a one-seater that can travel 200 miles on a single charge. How I think the electric trend could affect the Rolls-Royce share price Given the success of Tesla, there is a lot of current market buzz over many things electric. Many electric car company stocks, for example, have risen regardless of their fundamentals. Likewise, electric charging stocks have also done well. More in Rolls-Royce’s arena, an electric aircraft startup, Archer, could go public at a potential billion dollar valuation. If Rolls-Royce’s electric plane efforts get more positive attention, I think the company could be perceived as more green. If the market remains bullish on green stocks, I think Rolls-Royce share price could potentially benefit. I also reckon Rolls-Royce has an opportunity in terms of growth in electric aircraft engines or even in making electric planes. The electric plane market could be a huge growth market in the future, particularly in terms of electric air mobility or ‘flying taxis’. With more direct routes, flying taxis could save a lot of time in terms of commutes. If the electric air mobility market grows to what some analysts expect, and Rolls-Royce’s battery and electric engine solutions are competitive enough, I think the company could win a lot of new business. According to Morgan Stanley‘s estimates, the electric air mobility market could amount to $1.5trn by 2040. Although the market might still be a long way off, I think it’s big enough that it makes Rolls-Royce shares worth holding in my portfolio. I think the Rolls-Royce share price could benefit if management does well in the sector.  A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading Why I think the 94p Rolls-Royce share price could double my money Rolls-Royce share price has declined almost 30%. Here’s what I’d do The Rolls-Royce share price: here’s what I’d do right now The Rolls-Royce share price has fallen again. Should I buy the stock now? 3 reasons why the Rolls-Royce share price fell over 10% last week Jay Yao has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Tesla. 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. The post I think the Rolls-Royce share price could benefit from this potential trillion dollar market appeared first on The Motley Fool UK.
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  44. 2 ways the Rolls-Royce share price could benefit from the reopening economy (21/04/2021 - The Motley Fool UK)
    Earlier this week I wrote about a couple of stocks that I think could really benefit from the relaxation of lockdown here in the UK. As well as those ‘reopening stocks’, I think there are plenty of others that fit into this category. Rolls-Royce (LSE:RR) is one. The Rolls-Royce share price has been on a roller-coaster ride over the past couple of years. In the past year the share price is down 12%. But a more realistic picture is to look at the two-year performance that takes into account the stock market crash. Over this period, the Rolls-Royce share price is down 68%. So can it win back some ground in the reopening economy? Start the engines One reason I think that it can is due to commercial aviation. This comes under the civil aerospace division at the company, which makes up 41% of revenue of the overall business. It manufactures and services engines for aircrafts, an area that hasn’t been in high demand over the past year.  Lockdowns have meant that existing planes have spent a lot of time gathering dust, and the need to manufacture new engines has fallen. A £2.6bn loss from the division in 2020 was one of the main reasons why the Rolls-Royce share price has struggled to make gains. Yet with a reopening economy, this could change. I do understand that a risk here is that an open domestic economy doesn’t automatically mean an open global economy. So we might see the UK open for business, but the ability to fly could still be restricted. Another potential risk here is that the reopening of travel may come too late for peak summer demand. In this case, lower flying hours would see less need for engine maintenance.  In my opinion, this is unlikely to be the case for long though. So I do see this as a valid case for the Rolls-Royce share price rising in the second half of the year.  A robust defence division Another way the reopening economy could be good for business is due to the allocation of government spending. Rolls-Royce does a lot of business with the public sector through its defence division. The US and UK public sector account for 75% of revenue in this division. In a trading update, it said the expectation is for UK defence spending to remain robust in coming years (around $50bn annually, Rolls-Royce said). However, I think that this is conservative due to the high allocation of public funds that have been allocated to Covid-19. With a stronger economy into 2022 and beyond, this could see initiatives such as the furlough scheme being dropped. This could then see departments such as the MoD being given a higher budget. Or it could simply be that the focus can turn away from reactive Covid-19 measures to a more proactive focus on defence. A stronger Rolls-Royce share price? I think a reopening economy is good news for the Rolls-Royce share price, so I’m considering buying the shares. The extent of the benefit I think will be measured as to how much the easing of lockdown is just UK-centric versus the whole world. For that, only time will tell. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading Is the Rolls-Royce share price undervalued? Is reopening important for the Rolls-Royce share price? Should I invest in Rolls-Royce or Aston Martin shares right now? This is what I’d do about the Rolls-Royce share price right now! What I’d do about Rolls-Royce Holdings shares now jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post 2 ways the Rolls-Royce share price could benefit from the reopening economy appeared first on The Motley Fool UK.
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  45. Will the Rolls-Royce share price recover in 2021? (02/03/2021 - The Motley Fool UK)
    The aerospace sector is one of many to have been heavily disrupted by the pandemic and has consequently wreaked havoc on the Rolls-Royce (LSE:RR) share price. Why? Because the engineering company generates almost half its total revenue from the airline industry alone. And when most flights worldwide are grounded, all the income from selling and maintaining aircraft engines vanishes. But since its lowest point in October 2020, the Rolls-Royce share price has climbed almost 180%! Will it return to its pre-pandemic levels in 2021? And should I be considering the company as a value investment for my portfolio? Let’s take a look. Why is the Rolls-Royce share price rising? There are two primary catalysts for the recent surge in the Rolls-Royce share price, as I see it. The first is a rescue package. In October, the firm announced it had successfully avoided disaster with £5bn of additional financing by issuing bonds and rights issues. The second seems to be some resemblance of normality returning to the aerospace sector. The UK government has recently laid out its plans to ease lockdown restrictions. Within the proposed roadmap, holiday travel is set to resume mid-May this year, just in time for the summer holiday season. While this is still a few months away, several airlines – including EasyJet and TUI – have reported a massive surge in flight and package holiday bookings. Needless to say, this is excellent news for Rolls-Royce, and so its share price has taken off. But is it a good value stock? A business in distress While the impact from Covid-19 has been devastating on the Rolls-Royce share price, the company was in trouble long before the pandemic hit. In four of the last six years, it has been losing a significant amount of money. This ultimately forced it to raise additional capital with debt throughout that period and severely damaged its financial health. Before Rolls-Royce raised the additional £5bn, the stock had nearly £8.8bn of debt on the balance sheet. By comparison, the market capitalisation of the entire company is only around £9bn. This means the total level of debt of this business is now greater than its market value. And a highly-leveraged, unprofitable business in distress is a serious red flag in my eyes. Value stock or value trap? The return of holiday travel is undoubtedly good news for the Rolls-Royce’s share price. And I think it’s likely to continue climbing provided that the UK government’s roadmap doesn’t get changed (which is entirely possible). But even if all performance expectations are met, I believe the business is still in lots of trouble. It was struggling to stay on top of its interest payments before the pandemic. And now it has another £5bn of debt to deal with. So personally, this is not a business I want to own. Given the challenges that lie ahead, the risk does not match the reward, in my eyes. But, there is another stock that I believe is set to explode in 2021. Here is: A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading Will the Rolls-Royce share price reach 150p? Rolls-Royce share price: what I’d do given the upcoming full-year result Rolls-Royce shares: is it the right time to buy? The Rolls-Royce share price: have we seen the bottom? Rolls-Royce share price is around 100p. Here’s what I’d do Zaven Boyrazian does not own shares in Rolls-Royce Holdings. The Motley Fool UK has no position in any of the shares mentioned. 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. The post Will the Rolls-Royce share price recover in 2021? appeared first on The Motley Fool UK.
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  46. The Rolls-Royce share price is back above 100p, but I wouldn’t buy the stock yet (18/02/2021 - The Motley Fool UK)
    The Rolls-Royce (LON: RR) share price recently jumped back above 100p, after falling below this crucial level at the end of January. This is important because traders and investors tend to look at crucial levels like this to determine a stock’s momentum. A rising price can encourage more buyers, while a falling price can encourage more sellers.  From the perspective of a long term investor, this might not seem that important. However, a rising stock price can make it easier for a company to raise money from its investors. A falling stock price can significantly impact a firm’s ability to raise money, which may jeopardise its future.  Even though Rolls recently upgraded its profit forecasts for the year ahead, it is still struggling. Its outlook is also highly dependent on factors outside of its control. The pandemic has already wreaked havoc on the company’s finances. While light is starting to appear at the end of the tunnel, it could be years before the global aviation industry recovers from the pandemic.  As such, I think the company needs to keep its options open. That will be easier with a higher share price and improved investor sentiment.  Rolls-Royce share price risks As I covered above, I think the business’s outlook is improving. Unfortunately, it continues to face significant risks. These challenges suggest to me that now may not be the best time to buy the stock.  Instead, I’m going to wait to see how the company fairs over the next six months or so. By waiting, I think I will be able to gain more insight into the state of the global aviation industry and its potential for recovery in the months and years ahead. This will allow me to better understand what the future holds for the Rolls-Royce share price.  By sitting on the sidelines, I may miss some of the company’s performance if there is a strong recovery over the next few weeks. However, this is something I’m totally comfortable with. I would rather miss out on profits rather than end up owning a lousy investment. I would also rather wait and see the recovery takes hold rather than jumping in and hoping for the best at the current time. Risks and reward  This is based on my own personal risk preference. Other investors may have a different approach. After all, the company’s outlook has improved dramatically over the past six months. As my fellow writer recently stated, the stock could have the potential to double in the near-term based on its free cash flow estimates. That’s the best-case scenario, but I’m more worried about the business’s worst-case scenario. Rolls may have to raise yet more money from investors in this scenario. That could put significant downward pressure on the Rolls-Royce share price.  The high-calibre small-cap stock flying under the City’s radar Adventurous investors like you won’t want to miss out on what could be a truly astonishing opportunity… You see, over the past three years, this AIM-listed company has been quietly powering ahead… rewarding its shareholders with generous share price growth thanks to a carefully orchestrated ‘buy and build’ strategy. And with a first-class management team at the helm, a proven, well-executed business model, plus market-leading positions in high-margin, niche products… our analysts believe there’s still plenty more potential growth in the pipeline. Here’s your chance to discover exactly what has got our Motley Fool UK investment team all hot-under-the-collar about this tiny £350+ million enterprise… inside a specially prepared free investment report. But here’s the really exciting part… right now, we believe many UK investors have quite simply never heard of this company before! Click here to claim your copy of this special investment report — and we’ll tell you the name of this Top Small-Cap Stock… free of charge! More reading The Rolls-Royce share price is under £1: should I buy today? What I think Covid-19 variants mean for the Rolls-Royce share price Rolls-Royce share price: why I’d follow the Archer Aviation SPAC Rolls-Royce and Cineworld: are these UK shares too risky to buy now? The Rolls-Royce share price is down 66% this year. Here’s what I’d do now Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post The Rolls-Royce share price is back above 100p, but I wouldn’t buy the stock yet appeared first on The Motley Fool UK.
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  47. The Rolls-Royce share price has been ticking upwards. Is it time to buy now? (11/05/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) has not done well for shareholders in 2021 so far, but that might be changing. Over the past week, investors have been buying, and the Rolls-Royce share price has been edging up a little. The company is due to issue a trading update on Thursday, the same day as its AGM, so maybe the renewed interest has been in anticipation of that. Covid-19 vaccination results have been impressive. And the latest lockdown-lifting moves could be hinting at an opening up of travel before too much longer. The near grounding of the aviation business lies behind the troubles at Rolls, as it earns the bulk of its profits from maintenance and service contracts. And there’s been almost nothing to maintain or service. But after a reported loss of £4bn for 2020, I sincerely hope we’ll see a lot better in 2021. So what will I be looking for in Thursday’s update? I’m really not too interested in profits (or lack thereof) at this early stage, but there are two things I hope we’ll get some updates on. Both, I think, could drive the Rolls-Royce share price in 2021 — in one direction or the other. Debt and cash flow Firstly, I hope to see an update on the company’s liquidity situation. Rolls ended 2020 with debt of approximately £3.6bn, after the company’s refinancing efforts. In good times, that shouldn’t be too much of a burden for a company with a market cap of more than £9bn and annual turnover in excess of £15bn (in the pre-pandemic era). Obviously, good times are not with us now, and Rolls has been bleeding cash. The company has previously suggested a free cash outflow of around £2bn this year. That increases the risk of needing another cash injection. And that, I think, would see the Rolls-Royce share price hammered yet again. So that’s the second thing I hope we’ll hear — an update on where Rolls currently thinks its cash flow and profit/loss direction might be heading. Saying that, whatever Rolls-Royce does come up with on Thursday can really only be a reflection of the short-term situation. And my investment decisions are based on long-term prospects. The trouble is, those are very uncertain right now. There’s certainly pent-up demand for air travel. Holidays in the sun seem at least as important as getting back inside the pubs for a sizeable portion of the UK population. Rolls-Royce share price uncertainty But how soon that can happen could be critical to Rolls-Royce’s near-term prospects. And the level of renewed volumes should set the long-term scene. If we don’t get flying soon enough to salvage a reasonable part of the 2021 holiday season, Rolls could be in for another year of big losses. So that’s a risk for the Rolls-Royce share price this year. And even optimistic predictions suggest we won’t get back to 2019 flying volumes until the 2024-25 year. For me, there’s too much uncertainty, and with it too much risk, to invest right now. I do suspect, however, that the upcoming update could indeed spur an upwards share price move, providing it’s at least modestly upbeat. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading The Rolls-Royce share price has fallen. Is now the time to buy? Hargreaves Lansdown investors are buying Rolls-Royce shares. Should I buy too? How much is the Rolls-Royce share price really worth? Will the Rolls-Royce share price fly this summer holiday season? Can the Rolls-Royce share price bounce back? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post The Rolls-Royce share price has been ticking upwards. Is it time to buy now? appeared first on The Motley Fool UK.
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  48. The Rolls-Royce share price is back above 100p, but I wouldn’t buy the stock yet (19/02/2021 - The Motley Fool UK)
    The Rolls-Royce (LON: RR) share price recently jumped back above 100p, after falling below this crucial level at the end of January. This is important because traders and investors tend to look at crucial levels like this to determine a stock’s momentum. A rising price can encourage more buyers, while a falling price can encourage more sellers.  From the perspective of a long-term investor, this might not seem that important. However, a rising stock price can make it easier for a company to raise money from its investors. A falling stock price can significantly impact a firm’s ability to raise money, which may jeopardise its future.  Even though Rolls recently upgraded its profit forecasts for the year ahead, it’s still struggling. Its outlook is also highly dependent on factors outside of its control. The pandemic has already wreaked havoc on the company’s finances. While light is starting to appear at the end of the tunnel, it could be years before the global aviation industry recovers from the pandemic.  As such, I think the company needs to keep its options open. That’ll be easier with a higher share price and improved investor sentiment.  Rolls-Royce share price risks As I covered above, I think the business’s outlook is improving. Unfortunately, it continues to face significant risks. These challenges suggest to me that now may not be the best time to buy the stock.  Instead, I’m going to wait to see how the company fairs over the next six months or so. By waiting, I think I’ll be able to gain more insight into the state of the global aviation industry and its potential for recovery in the months and years ahead. This will allow me to better understand what the future holds for the Rolls-Royce share price.  By sitting on the sidelines, I may miss some of the company’s performance if there’s a strong recovery over the next few weeks. However, this is something I’m totally comfortable with. I’d rather miss out on profits rather than end up owning a lousy investment. I’d also rather wait and see the recovery take hold rather than jumping in and hoping for the best at the current time. Risks and reward  This is based on my own personal risk preference. Other investors may have a different approach. After all, the company’s outlook has improved dramatically over the past six months. As my fellow writer GA Chester recently stated, the stock could have the potential to double in the near-term, based on its free cash flow estimates. That’s the best-case scenario. But I’m more worried about the business’s worst-case scenario. Rolls may have to raise yet more money from investors in this scenario. That could put significant downward pressure on the Rolls-Royce share price.  The high-calibre small-cap stock flying under the City’s radar Adventurous investors like you won’t want to miss out on what could be a truly astonishing opportunity… You see, over the past three years, this AIM-listed company has been quietly powering ahead… rewarding its shareholders with generous share price growth thanks to a carefully orchestrated ‘buy and build’ strategy. And with a first-class management team at the helm, a proven, well-executed business model, plus market-leading positions in high-margin, niche products… our analysts believe there’s still plenty more potential growth in the pipeline. Here’s your chance to discover exactly what has got our Motley Fool UK investment team all hot-under-the-collar about this tiny £350+ million enterprise… inside a specially prepared free investment report. But here’s the really exciting part… right now, we believe many UK investors have quite simply never heard of this company before! Click here to claim your copy of this special investment report — and we’ll tell you the name of this Top Small-Cap Stock… free of charge! More reading The Rolls-Royce share price is rising this week. Should I buy? The Rolls-Royce share price is under £1: should I buy today? What I think Covid-19 variants mean for the Rolls-Royce share price Rolls-Royce share price: why I’d follow the Archer Aviation SPAC Rolls-Royce and Cineworld: are these UK shares too risky to buy now? Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post The Rolls-Royce share price is back above 100p, but I wouldn’t buy the stock yet appeared first on The Motley Fool UK.
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  49. I’m tempted by the Rolls-Royce share price. Here’s why I’m not buying (13/03/2021 - The Motley Fool UK)
    It’s been a good month for the Rolls-Royce (LSE: RR) share price, which is up 25% in that time. This doesn’t change the fact the FTSE 100 aircraft engine maker is in dire straits, and remains a risky buy. On Thursday, it reported a 23.9% drop in underlying revenue to £11.8bn, with civil aerospace revenues down a thumping £3bn. The group reported a £2bn underlying operating loss, rising to £4bn after hedging and financing charges. Markets took the news on the chin, with the Rolls-Royce share price up slightly. Investors already knew the company was in trouble. Is this an opportunity or a threat? Management saved more than £1bn in 2020 from “in-year cash mitigations” and “removed” 7,000 roles. However, cutting costs and restructuring isn’t enough when the group relies on airlines buying its engines and signing service contracts based on hours flown. But entire fleets have been grounded. I’m tempted to take a punt on the Rolls-Royce share price. If vaccine programmes do their work and release the world from lockdown, management says it could turn cash flow positive as early as the second half of this year. It calculates that engine flying hours (EFH) will climb to 55% of 2019 levels in 2021, and possibly 80% in 2022. By then, cash flow could hit £750m. I’m sceptical about these projections. While many of us are desperate to get airborne again, it’s fanciful to expect air travel to recover that quickly. Vaccine programmes will take time to roll out and many passengers will remain uneasy. Also, there’s the danger of further restrictions, if we get yet another wave of Covid. I don’t think Covid-stricken industries such as travel can expect a swift return to normality. Especially since the rise of Zoom is likely to reduce future business travel. For the Rolls-Royce share price to stage a convincing revival, I think management needs to explore potential growth areas in sectors beyond civil aerospace. That will take time. Management does have plenty of funds at its disposal, if things drag on longer than expected. It ended the year with liquidity of £9bn, made up of £3.5bn cash and £5.5bn undrawn credit facilities. Rolls-Royce share price faces headwinds Optimists may point towards 8% profit growth in the group’s defence division, but this makes up less than a third of overall revenues. Despite the recent recovery, the Rolls-Royce share price still trades two thirds lower than two years ago. This will tempt contrarians and bargain seekers, and I’d usually include myself in that camp. However, I think it would take me five or 10 years before I’d see much reward from investing in Rolls-Royce. Share price growth is likely to prove sluggish post pandemic, when the reality of the task it faces sinks in. I’d have to be patient about dividends too, as Rolls-Royce is barred from returning any cash to shareholders before 31 December 2022 at the earliest, under rules attached to its loans. Any recovery in the Rolls-Royce share price is going to be a long haul. I’ll stay home. This excites me more. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading FTSE 100 stock watch: will the Rolls-Royce share price recover? The Rolls-Royce share price holds steady after big 2020 loss. Should I buy? Rolls-Royce share price: can it go back up to 200p? Why Rolls-Royce shares nudged higher today Can the Rolls-Royce share price keep climbing after today’s results? Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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. The post I’m tempted by the Rolls-Royce share price. Here’s why I’m not buying appeared first on The Motley Fool UK.
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