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Rolls-Royce Holdings PLC - Stock Quote RR.

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Morningstar's Rolls-Royce Holdings PLC Stock Analysis

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Rolls-Royce Performing in Line With Expectations as Flying Hours Recover From a Low Base

Joachim Kotze, CFA Equity Analyst

Analyst Note

| Joachim Kotze, CFA |

Narrow-moat Rolls-Royce’s trading update for the first four months of the year was light on information. Outgoing CEO Warren East said the performance is in line with expectations and full-year guidance is maintained. As a reminder, full-year guidance as communicated in February for slightly higher revenue and flat margins disappointed investors as they expected the global recovery in flying hours to have a more meaningful impact on financials. Rolls-Royce is trying to sell the long-term story of growth in its new markets segment, which includes electric planes and small modular nuclear reactors. Although we believe Rolls-Royce has the capabilities to invest in these growing markets, they are far from being commercially viable and the medium-term prospects of the group will rest on the performance and recovery of the civil aerospace segment.

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Rolls-Royce Holdings PLC's Company Profile

Business Description

Rolls-Royce operates three core business segments: civil aerospace, power systems, and defense. The civil aerospace segment builds engines powering wide-body aircraft, regional and business jets, and offers aftermarket services. Twenty years ago, the firm pioneered full-service flight hour contracts with the TotalCare package. Power systems provides power solutions to multiple end markets (defense, agriculture, marine, and power generation) while the defense business provides military, ground vehicle and naval propulsion solutions.

90 York Way, Kings Place
London, N1 9FX, United Kingdom
T +44 2072229020
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings
Fiscal Year End Dec 31, 2022
Stock Type
Employees 40,000