reports
- Andreea Matysiak
Morningstar | RYCEY Updated Forecasts and Estimates from 09 Jul 2019
After taking a fresh look at narrow-moat Rolls-Royce, we reduce our FVE to GBP 11, 6% below our previous estimate to account for higher uncertainty about firm’s earnings profile. We can't precisely forecast key margin drivers such as flight time and spare parts on a year-to-year basis. We believe that multiples, such as the popular P/E, have a short-term view and misrepresent Rolls-Royce's earnings potential. The engine business has a long-term return profile: at program inception, engines ...
- Andreea Matysiak
Morningstar | RYCEY Updated Forecasts and Estimates from 05 Jul 2019
After taking a fresh look at narrow-moat Rolls-Royce, we reduce our FVE to GBP 11, 6% below our previous estimate to account for higher uncertainty about firm’s earnings profile. We can't precisely forecast key margin drivers such as flight time and spare parts on a year-to-year basis. We believe that multiples, such as the popular P/E, have a short-term view and misrepresent Rolls-Royce's earnings potential. The engine business has a long-term return profile: at program inception, engines ...
- Andreea Matysiak
Morningstar | Fresh Look at Rolls-Royce; Narrow Moat and Stable Trend ...
After taking a fresh look at narrow-moat Rolls-Royce, we reduce our FVE to GBP 11, 6% below our previous estimate to account for higher uncertainty about firm’s earnings profile. We can't precisely forecast key margin drivers such as flight time and spare parts on a year-to-year basis. We believe that multiples, such as the popular P/E, have a short-term view and misrepresent Rolls-Royce's earnings potential. The engine business has a long-term return profile: at program inception, engines ...
- Andreea Matysiak
Morningstar | Fresh Look at Rolls-Royce; Narrow Moat and Stable Trend ...
After taking a fresh look at narrow-moat Rolls-Royce, we reduce our FVE to GBP 11, 6% below our previous estimate to account for higher uncertainty about firm’s earnings profile. We can't precisely forecast key margin drivers such as flight time and spare parts on a year-to-year basis. We believe that multiples, like the popular P/E, have a short-term view and misrepresent Rolls-Royce's earnings potential. The engine business has a long-term return profile: at program inception, engines are...
- Andreea Matysiak
Fresh Look at Rolls-Royce; Narrow Moat and Stable Trend Maintained; Sh...
After taking a fresh look at narrow-moat Rolls-Royce, we reduce our FVE to GBP 11, 6% below our previous estimate to account for higher uncertainty about firm’s earnings profile. We can't precisely forecast key margin drivers such as flight time and spare parts on a year-to-year basis. We believe that multiples, like the popular P/E, have a short-term view and misrepresent Rolls-Royce's earnings potential. The engine business has a long-term return profile: at program inception, engines are s...
- Denise Molina
Morningstar | Rolls-Royce Reaffirms Guidance; Restructuring Progressin...
In its recent trading update, Rolls-Royce guided towards the upper half of its range for fiscal 2018 EBIT and free cash flow. Since the update, the company has signed a $300 million deal with Lebanon's Middle East Airlines for engines and service on Trent 7000 engines, which will go into four Airbus wide-body A330-900neos for the airline. (Rolls-Royce is the only engine supplier for the A330neos.)Â The shares are down more than 20% from their 2018 peak in August over market concerns regarding s...
- Denise Molina
Rolls-Royce Reaffirms Guidance; Restructuring Progressing, Including R...
In its recent trading update, Rolls-Royce guided towards the upper half of its range for fiscal 2018 EBIT and free cash flow. Since the update, the company has signed a $300 million deal with Lebanon's Middle East Airlines for engines and service on Trent 7000 engines, which will go into four Airbus wide-body A330-900neos for the airline. (Rolls-Royce is the only engine supplier for the A330neos.)Â The shares are down more than 20% from their 2018 peak in August over market concerns regarding s...
- Denise Molina
Morningstar | RYCEY Updated Forecasts and Estimates from 04 Dec 2018
Rolls-Royce is one of only a few firms in the world that can successfully develop and manufacture civil and defence jet engines, which is a key reason we believe it possesses a narrow moat. The growing installed base of engines that have useful lives of more than 25 years results in a stable, long-term annuity of future services revenue. Rolls’ market share currently stands at about 35% of the wide-body fleet, but we think its Trent 1000 and Trent XWB engines will increase this percentage to a...
- Denise Molina
Morningstar | Rolls-Royce Company Report
Rolls-Royce is one of only a few firms in the world that can successfully develop and manufacture civil and defence jet engines, which is a key reason we believe it possesses a narrow moat. The growing installed base of engines that have useful lives of more than 25 years results in a stable, long-term annuity of future services revenue. Rolls’ market share currently stands at about 35% of the wide-body fleet, but we think its Trent 1000 and Trent XWB engines will increase this percentage to a...
- Denise Molina
Rolls-Royce Company Report
Narrow-moat Rolls-Royce reported excellent first-half revenue of GBP 7 billion, up 12% year over year on a reported basis and up 14% on an organic basis, with underlying operating profit increasing to GBP 141 million, improving on an operating loss of GBP 84 million last year. Unfortunately, solid operational progress was overshadowed by a one-off charge of GBP 554 million for additional inspection, certification, and intervention costs for the Boeing 787 engine (Trent 1000). With certification ...
- Jeffrey Vonk
Morningstar | RYCEY Updated Star Rating from 02 Aug 2018
Narrow-moat Rolls-Royce reported excellent first-half revenue of GBP 7 billion, up 12% year over year on a reported basis and up 14% on an organic basis, with underlying operating profit increasing to GBP 141 million, improving on an operating loss of GBP 84 million last year. Unfortunately, solid operational progress was overshadowed by a one-off charge of GBP 554 million for additional inspection, certification, and intervention costs for the Boeing 787 engine (Trent 1000). With certification ...
- Jeffrey Vonk
Morningstar | Charge Overshadows Stellar Improvement in Rolls-Royce's ...
Narrow-moat Rolls-Royce reported excellent first-half revenue of GBP 7 billion, up 12% year over year on a reported basis and up 14% on an organic basis, with underlying operating profit increasing to GBP 141 million, improving on an operating loss of GBP 84 million last year. Unfortunately, solid operational progress was overshadowed by a one-off charge of GBP 554 million for additional inspection, certification, and intervention costs for the Boeing 787 engine (Trent 1000). With certification ...
- Jeffrey Vonk
Charge Overshadows Stellar Improvement in Rolls-Royce's Civil Aviation...
Narrow-moat Rolls-Royce reported excellent first-half revenue of GBP 7 billion, up 12% year over year on a reported basis and up 14% on an organic basis, with underlying operating profit increasing to GBP 141 million, improving on an operating loss of GBP 84 million last year. Unfortunately, solid operational progress was overshadowed by a one-off charge of GBP 554 million for additional inspection, certification, and intervention costs for the Boeing 787 engine (Trent 1000). With certification ...
- Jeffrey Vonk
Morningstar | What Investors Learned During the Farnborough Air Show
We came away from Farnborough thinking that signs of life exist in regional jets, the Boeing 797 aircraft might not be launched after all, and demand is still very weak for large wide-bodies like the 777X and A350-1000. Per the Flight Global order tracker, aircraft manufacturers landed 1,464 orders and options (excluding conversions), which represents a 238 aircraft increase over the 2017 Paris Air Show. Additionally, a tentative deal between the Department of Defense and Lockheed Martin on the ...
- Jeffrey Vonk
What Investors Learned During the Farnborough Air Show
We came away from Farnborough thinking that signs of life exist in regional jets, the Boeing 797 aircraft might not be launched after all, and demand is still very weak for large wide-bodies like the 777X and A350-1000. Per the Flight Global order tracker, aircraft manufacturers landed 1,464 orders and options (excluding conversions), which represents a 238 aircraft increase over the 2017 Paris Air Show. Additionally, a tentative deal between the Department of Defense and Lockheed Martin on the ...
- Jeffrey Vonk
What to Expect at Farnborough 2018
The aviation world is gearing up for the Farnborough Air Show, slated for July 16-22, and we’re expecting orders for small wide-bodies (787 and A330neo), coupled with decent demand for narrow-bodies. However, we don’t think larger wide-bodies (777X and A350-1000) will see significant orders, and we’re also not expecting Boeing to formally launch its the next-generation midsize aircraft, or NMA. We think Embraer will land some E2/E1 orders and the C Series--now under Airbus control--could b...
- Jeffrey Vonk
We Increase Rolls-Royce’s FVE Due to Labor Cost Reduction and More P...
After incorporating additional insights provided at the June 2018 Capital Day, we are increasing our fair value estimate for Rolls-Royce to GBX 1,140 per share (from GBX 1010) for the London-listed shares, and to $15 (from $14) for the ADRs. We maintain our narrow moat rating. Close to 60% of the fair value estimate increase is related to the benefits of the recently announced restructuring, while 50% of the increase results from a more positive stance on the power systems segment's margin enha...
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