Rolls-Royce Holdings stock: fair value
RRU.DEThe fair value of Rolls-Royce Holdings under our model is $21.14, the price is 14% below.
The fair value is an estimate from our model, not a price target.
Daily figure as of 13 Nov 2026
Valuation signal
Modestly undervaluedIn our model the price counts as cheap below $16.26 and expensive above $30.20 (uncertainty medium, based on the price swings of the past year).
The two parts of the fair value come to $27.27 (cash-flow model) and $15.02 (industry comparison), and the gap between them shows how uncertain the estimate is.
Calculated with a cost of equity of 8.8%. At 9.8% the fair value would be $18.74, at 7.8% it would be $24.76.
Where the number comes from
Half from the cash-flow model, half from earnings times the industry P/E (31.3).
Ten-year cash-flow model from smoothed free cash flow and its past growth until it reaches 3.8%. Discounted at 8.8% (floor: government bond yield 3.8% plus 5 percentage points, since beta 1 times the risk premium would give less); no analyst estimates were available.
Calculate with your own assumptionsThe calculation step by step
With these figures the cash flow model arrives at $27.27 per share: free cash flow for the next ten years, each year discounted to today at 8.8%, plus the terminal value for the years after. The table explains the calculation; it is not a recommendation.
Calculation as a table
| Year | Free cash flow | Source | Discount factor | Present value (discounted at 8.8%) |
|---|---|---|---|---|
| 2026 | $6.52B | extrapolated at 34.8% | 0.9189 | $5.99B |
| 2027 | $8.18B | extrapolated at 25.5% | 0.8443 | $6.91B |
| 2028 | $9.74B | extrapolated at 19.0% | 0.7758 | $7.56B |
| 2029 | $11.15B | extrapolated at 14.5% | 0.7129 | $7.95B |
| 2030 | $12.41B | extrapolated at 11.3% | 0.6550 | $8.13B |
| 2031 | $13.53B | extrapolated at 9.0% | 0.6019 | $8.14B |
| 2032 | $14.54B | extrapolated at 7.5% | 0.5531 | $8.04B |
| 2033 | $15.47B | extrapolated at 6.4% | 0.5082 | $7.86B |
| 2034 | $16.33B | extrapolated at 5.6% | 0.4670 | $7.63B |
| 2035 | $17.16B | extrapolated at 5.1% | 0.4291 | $7.36B |
| Step | Value |
|---|---|
| Sum of present values (ten years) | $75.57B |
| Terminal value: cash flow 2035 × (1 + 3.8%) / (8.8% − 3.8%) | $355.65B |
| Present value of terminal value (× 0.4291) | $152.6B |
| Equity value (sum plus present value of terminal value) | $228.17B |
| Shares (diluted) | 8.37B |
| Value per share (equity value divided by shares) | $27.27 |
| Earnings per share, last twelve months | $0.48 |
| × 31.3 (industry P/E) | $15.02 |
| Fair value (average of both parts) | $21.14 |
The model uses free cash flow after interest, which belongs to shareholders, discounted at the cost of equity. Net debt is therefore not deducted again.
Data status and sources
- Score
- Daily value of 13 Nov 2026, recalculated nightly
- Price
- Closing price of 12 Nov 2026
- Latest annual report
- Fiscal year 2025, period end 31 Dec 2025
- Currency
- Amounts in US dollars, converted at the ECB reference rate of 12 Nov 2026 ($1 = €0.9024, $1 = £0.7544)
- Source
- Financial statements, ratios and prices from Financial Modeling Prep (FMP), based on the company's reports. MEQIRI calculates the score and fair value from them.
Mandatory disclosures for this rating
- ; time horizon around 12 months
- Rated Strong since 13 Nov 2026, previously Neutral
- Valuation signal Fairly valued since 7 Nov 2026
- End-of-day prices, metrics cached for up to 24 hours
- Score and fair value are estimates from a disclosed model. They are not facts and not a price target.
- Produced by SSM Ventures UG (haftungsbeschränkt), responsible person Sven Brostmeyer, Managing Director, automatically according to the disclosed model.
- Not investment advice. Losses up to and including a total loss are possible. Personal circumstances are not considered.