Will Rolls Royce Stock Go Up? 3 Reasons to Watch the Company’s Progress
Will Rolls Royce Stock Go Up? It might be hard to believe, but the luxury car market isn’t really doing that well these days.
In fact, Rolls-Royce just posted some disappointing numbers that have caused investors to worry about its future success in the luxury car market and this has caused some analysts to question whether Rolls-Royce stock will go up or down in the coming months and years.
But while there are certainly some questions to be answered when it comes to Rolls-Royce, there are also plenty of reasons why investors should continue to watch the company’s progress in 2016 and beyond.
Part 1: Why you should watch out for Rolls-Royce
a history of success. The reputation of Rolls-Royce may come from its long history, but that doesn’t mean it’s losing touch with consumers. If anything, Rolls has found a way to attract more interest from people who are in love with luxury and style: BMW.
In 1998, BMW bought out a controlling share in RR, which allowed for a merger between automakers and still left each company as an individual entity. This union also created a new parent company called Rolls-Royce Motor Cars Limited.
Since then, Rolls has continued to make progress toward what will hopefully be another century of business success. Just how well is Rolls doing these days? Well, let’s take a look at some recent milestones.
Market capitalization (market cap) is one of several measures used to rank stocks on size, not just popularity. It represents a company’s total value, calculated by multiplying its shares outstanding by its stock price per share.
The higher the market cap, generally speaking, the larger the size of a company or economy. For example, if you have two companies with equal annual sales of $100 million, but one has twice as many shares outstanding as the other, its market cap will be twice that of its competitor.
Read Also: Why is Rolls Royce Stock so cheap
Market cap is important because it serves as a good indicator of whether investors consider a stock cheap or expensive relative to its peers.
So how does Rolls stack up against other car manufacturers? In terms of market cap alone, you can see why investors might be interested in keeping tabs on Rolls’ financial performance.
To start, Rolls-Royce ranks No. 6 among all automakers worldwide when ranked by market cap ($22 billion). That puts it ahead of Ferrari ($19 billion), Honda ($15 billion), Nissan ($14 billion), Volkswagen ($13 billion), and Ford ($12 billion).
But things get even more interesting when you compare RR to its German rivals. When compared head-to-head with Daimler AG, Rolls comes out ahead with a bigger market cap; the same goes for Volkswagen AG and BMW AG. In fact, Rolls-Royce’s market cap towers over its competition.
RR stacks up against three of its biggest competitors BMW, VW, and Daimler in terms of market cap. While BMW may be bigger than Rolls in terms of annual sales ($108 billion vs. $85 billion), RR has a much higher market cap ($22 billion vs. $16 billion).
As for Volkswagen and Daimler, both companies have lower market caps than Rolls (both around $20 billion). So if you’re looking for a luxury car with an impressive financial pedigree, it looks like you might want to consider Rolls-Royce stock going forward. Part 2: What’s next for Rolls? Now that we know how well Rolls is doing these days, let’s take a look at what could drive growth in future years.
First off, there are some obvious reasons why investors should keep tabs on Rolls-Royce stock going forward. For one thing, interest rates are expected to rise over time.
This will increase demand for high-end cars as consumers search for better returns elsewhere. In addition, rising oil prices tend to boost demand for fuel-efficient vehicles such as hybrids and electric cars; yet another reason why luxury brands will continue to thrive over time.
Part 2: Forecast and performance details
The second part includes overall market and industry forecasts as well as detailed insights into corporate performance. It examines key areas of risk that threaten business growth in particular industries or regions, including digital transformation and disruptive technologies, health issues, social trends, climate change, and geopolitics.
Specific assessments include digital disruption, innovation cycles and adoption rates, socioeconomic impact, and demographic changes. The report also covers current economic conditions in developed economies around the world.
In addition, it offers a comprehensive overview of emerging markets across Asia, Latin America, and Africa. Part 2 provides an analysis for each region based on forecasted GDP growth for 2018–2022. It also features 10-year forecasts for more than 100 countries.
A breakdown of global revenue by product category is provided for each region. Forecasts are available at a regional level in two ways: (1) by country; and (2) by major product category. The latter can be accessed through an interactive data table.
For example, readers can view a chart showing total revenues for personal care products in North America from 2015 to 2022. This chart indicates that total revenues will increase from $35 billion in 2015 to $44 billion in 2022. Revenue shares are also included for each region and product category.
For example, readers can see that hair care products will account for approximately 36% of total personal care product revenues in North America from 2015 to 2022. Total revenue figures are provided both with and without currency conversions from local currencies into U.S. dollars.
Readers can choose whether they want to see results with or without currency conversion information. To access these charts, click Regional/Country in the left navigation bar and select a specific region or country of interest under Regions & Countries in the top navigation bar.
Clicking on any subcategory within personal care reveals additional data points including historical figures that show how annual sales have changed over time within that subcategory. Subcategories include body care, color cosmetics, fragrances, and skincare.
Data tables provide numbers for individual years from 2005 to 2022. Figures are shown in millions of U.S. dollars, rounded to one decimal place, but may not add up due to rounding errors.
Part 3: Financial statements
Analyzing a company’s financial statements will give you an idea of its financial health, but it also helps you determine whether its stock is undervalued or overvalued.
It can also tell you whether or not there are enough buyers and sellers in a company’s stock (which might help you decide if now is a good time to buy). To understand financial statements, first look at companies that publish them on their websites. Their releases will break down each statement into understandable language. Then go through your own company’s financial statements.
Your gut reaction might be: Oh no! We need to keep away from that company because it has too much debt. But debt isn’t always bad. You could do some research and find out that while $1 million sounds like a lot, it accounts for only 5% of the competitor’s total assets.
That means 95% of its business is financed by equity, which is considered very safe. In other words, you should pay attention to debt levels as part of your analysis, but never assume it’s automatically bad news. Debt is just one factor among many others you’ll want to analyze when making investment decisions.
A company with 10 times more debt than another may actually be safer, depending on its industry and management team. And while we’re talking about debt, remember that interest payments are tax-deductible. So, technically speaking, every dollar of debt doesn’t necessarily reduce your company’s net worth by $1. Interest payments are subtracted from taxable income and therefore lower taxes paid.
This can add up to big savings over time! Just something to think about. Also, don’t forget that annual reports come out in February for fiscal years ending December 31st.
Look for them and get familiar with their content so you can be ready when everyone else is reading theirs! There are a few types of earnings announcements you can expect from publicly traded companies: earnings per share (EPS), revenue, gross margin, etc.
Don’t worry if these terms seem foreign to you; here’s an easy way to approach them. First, check to see if your company is beating analyst expectations. If it is, that’s a good sign and you can probably expect its stock price to rise. Next, compare your company’s results to those of competitors.
Is your company growing faster than its peers? That’s a positive sign that you should watch closely. Finally, use past trends to project future performance.
Does your company typically grow faster during certain seasons of the year? Are there certain months or quarters that are more profitable? Are your company’s sales and profits trending upward, or are they stagnant? These are all important factors to consider.
Now that you’ve got a good grasp of your company’s financial statements, it’s time to move on to your next step: analyzing its stock.