Rolls-Royce Holdings plc (RYCEY) — Quantitative Forecast & Factor Scores
RYCEY screens as moderate-quality and attractively valued — upside depends on sustained earnings execution at current multiples.
RYCEY's quantitative grade is Hold, with moderate downside risk (CVaR -14.8%), and quality metrics (net margin 28%, ROE 6%). Rolls-Royce Holdings plc (RYCEY) trades at $14.57 with a valuation grade of Hold: a trailing P/E of 15.8x at a 28% discount to sector median, net margins of 27.5%, a DCF-implied intrinsic range of $12–$16 suggesting a -3% margin of safety, beta 1.17 (moderate risk profile).
Key Takeaways
- Valuation: Hold grade — P/E 15.8x — DCF range $12–$16 implies -3% margin of safety
- Risk: CVaR -14.8% (95th percentile, 1-month) indicates moderate tail exposure; beta of 1.17 amplifies broad market moves in both directions
- Strengths: Size 4.0/5, 28% net margin, 6% ROE dominate the factor profile
- Watch: Monitor earnings delivery — premium multiples leave limited margin for misses
Quantitative Factor Profile
Key Metrics
| Metric | Value |
|---|---|
| Current Price | $14.57 |
| P/E Ratio (TTM) | 15.8x |
| Forward P/E | 24.6x |
| P/S Ratio | 5.7 |
| EV/EBITDA | 26.1 |
| Beta | 1.17 |
| Net Margin | 27.5% |
| ROE | 6.2% |
| Debt/Equity | 158.4% |
| Dividend Yield | 0.89% |
| CVaR (95%, 1M) | -14.8% |
| Market Cap | $121.7B |
RYCEY vs. Sector Peers
| Ticker | P/E (TTM) | Beta | CVaR-95 | Net Margin |
|---|---|---|---|---|
| RYCEY | 15.8x | 1.17 | -14.8% | 27.5% |
| BAESY | 31.3x | 0.01 | -13.4% | 7.3% |
| EADSY | 23.8x | 0.83 | -16.2% | 7.1% |
| RHM.DE | 64.3x | 0.34 | -17.9% | 7.0% |
| THLEF | 29.8x | 0.13 | -12.6% | 7.6% |
RYCEY screens as a fundamentally sound business, at an attractive entry point relative to intrinsic value. Recent earnings delivery has been inconsistent against consensus.
RYCEY trades at 15.8x trailing earnings — 28% below the Industrials sector median of 22.0x.
Hold means what it says here — I am not selling, but I am not buying either. The risk/reward at current prices is roughly balanced, and roughly balanced is not enough reason to deploy fresh capital. The DCF sits close to the current price — no compelling discount, no obvious overshoot. In that setup, everything rides on the next earnings report. That is the moment I am watching: whether the delivery justifies the multiple, or whether the stock needs to come in before the risk/reward works again. Re-accelerating earnings surprise magnitude would shift my view constructive. Continued compression of beat magnitude at this multiple would move me toward a reduce.
Is RYCEY a buy, hold, or sell?
RYCEY carries a valuation grade of Hold. At a trailing P/E of 15.8, the stock trades at a 28% discount to the Industrials sector median of 22.0x. Our discounted cash flow model produces an intrinsic range of $12–$16 — implying a -3% margin of safety at the current price of $14.57. The width of the DCF range reflects genuine uncertainty in the terminal growth rate assumption: the correct framework is a probability-weighted distribution over scenarios, not a single point estimate.
Analyst estimate revisions are trending downward.
What are RYCEY's key risk factors?
With a beta of 1.17, RYCEY exhibits an above-market risk profile relative to the broad market. The 95th-percentile CVaR of -14.8% on a one-month horizon should inform position sizing directly: at a 10% portfolio weight, this tail event contributes approximately 1.5% of total portfolio loss in the worst 5% of months. Net margins of 27.5% are significantly above the Industrials sector average of 11%, reflecting durable pricing power. Leverage is moderate with debt-to-equity at 158%.
How does RYCEY fit in a diversified portfolio?
At typical HENRY portfolio weights — 10–20% of the equity allocation — RYCEY carries a beta of 1.17, meaning it amplifies broad market moves proportionally. The appropriate weight is not a function of conviction alone, but of the full covariance structure across all holdings. See the Ledoit-Wolf covariance framework for the methodology behind these calculations.
As a Industrials constituent, RYCEY's risk profile should be evaluated alongside sector peers when constructing diversified portfolios.
True portfolio risk is a function of the full covariance structure across all holdings — not individual stock metrics. The Portfolio Health Check quantifies this at the portfolio level: it surfaces hidden concentration, marginal CVaR contributions, and the degree to which your overall allocation deviates from an optimal risk-adjusted mandate. The RYCEY analysis here is a single node in that larger structure.
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Launch Live Analysis →This analysis is produced using a systematic quantitative framework applied to market data and does not constitute investment advice. Prose commentary is AI-assisted and generated from structured quantitative inputs. All data and metrics are as of 2026-03-31 and are point-in-time estimates subject to revision without notice. CVaR figures are based on historical simulation and do not guarantee future outcomes. DCF ranges and upgrade/downgrade triggers are forward-looking statements based on current assumptions and may not materialise. Past performance does not guarantee future results. This analysis does not account for individual circumstances, tax position, or investment objectives — consult a qualified financial advisor before making investment decisions. This content is intended for informational purposes only and does not constitute regulated investment advice under MiFID II or FCA guidelines. This content is not intended for US persons or residents of jurisdictions where its distribution would be contrary to local law or regulation. This service is not directed at residents of Finland, Sweden, Norway, Denmark, Iceland, or Poland. The author may hold long or short positions in securities mentioned in this analysis. Nothing on this page represents a solicitation to buy or sell any security. A.L. Capital Advisory is an independent private advisory practice and is not affiliated with Rolls-Royce Holdings plc.