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Is the Rolls-Royce share price secretly cheap? Here’s what the analysts say!
['Royston Wild', 'Min Read']
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That sort of extraordinary gain — much like SpaceX, another growth share that initially captivated investors' imaginations at its IPO — has inevitably led some to claim the FTSE 100 company is now absurdly expensive.
Yet when you drill down to it, are Rolls-Royce shares really that expensive?
But first…Falling valuationThere are plenty of 'sexier' things to talk about than a stock's price-to-earnings (P/E) ratio.
As the chart shows, Rolls' P/E ratio tumbles over the next few years as projected earnings take off:Source: Claude AIBut here's the thing: though the P/E drops, Rolls' ratio remains uncomfortably on paper.
The question is, are Rolls-Royce shares worthy of this premium valuation?