If you’d have bought Rolls-Royce shares just 2 years ago you’d have a staggering amount now
- Rolls-Royce shares have had a mammoth two years
- And if you’d invested in 2022, the amount you’d have now might surprise you
- But investing now might not be such a good idea
Published on May 31, 2024 at 4:40 PM (UTC+4)
by Amelia Jean Hershman-Jones
Last updated on Jun 03, 2024 at 8:13 AM (UTC+4)
Edited by
Tom Wood
Hindsight is 20/20, but if the past two years have taught us anything it’s that Rolls-Royce shares have been a pretty sure bet.
In fact, if you’d invested in Rolls-Royce shares two years ago, the amount you’d have now is pretty staggering.
The Rolls-Royce share price performance has been incredible and keeps getting better – even during the past month when the FTSE 100 rally went backward.
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Their new post-Covid strategy of selling luxury cars at airshows for millionaire window shoppers is paying off.
It’s up 202.58% however, the US chip maker trailed at 184.36%.
The biggest benefits of the rally went to those who got in early.
If you invested $12,700 in Rolls-Royce shares two years ago, with the stock skyrocketing by 418.93% it would have grown by over 500% to roughly $66,000.
Despite US tech giant, Nvidia reportedly being worth more than Tesla and Amazon combined, Rolls-Royce’s share price smashed their performance. over the last year.
This could be down to constant innovation – like the 2025 Rolls-Royce Cullinan Series II making its public debut at Villa d’Este in Italy in May.
While what goes up must come down – it seems the aircraft engine maker is still paying down debt, boosting its credit rating, widening margins, improving contracts, and generally strengthening its balance sheet.
On May 24, the CEO of Rolls-Royce, Tufan Erginbilgic, said the brand had a ‘strong start’ despite supply chain issues in the luxury automotive field.
Service agreement large engine flying hours have also returned to pre-pandemic 2019 levels.
The Defense arm of RR also won contracts for the Australian submarine program.
Meanwhile, the Power Systems division is being driven forward by increased demand from artificial intelligence (AI) as well as cloud service providers.
But while it’s a rosy picture, it’s probably best to hold onto your hard-earned cash.
Rolls-Royce shares snapped back after they were oversold.
And this outstanding-performance rally means they’re now being overbought.
It’s pricier than the average FTSE 100 stock, currently trading at 31.9 times forward earnings for 2024.
If performance falls short of high expectations, the stock could get a rapid rerating.
Markets are banking on a dividend too, after years of paying no income.
The forecasted yield is 0.6% with that gradually experiencing limited growth in the short-term.
While the long-term outlook remains strong, the risks of price drops are, as ever, looming and growing.
This is inevitable after a boom like this.
Advice from personal finance journalist, Harvey Jones, is to buy if shares dip and hold onto them.
If they don’t? Hold tight for the next FTSE 100 recovery play.
Some of the images in this story were created using AI.
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London-based Amelia cut her journalistic teeth covering all things lifestyle, wellness and luxury in the UK capital. Fast-forward a decade and the experienced content creator and editor has put pen to paper for glossy magazines, busy newsrooms and coveted brands. When her OOO is on you can find her spending quality time with her young family, in the gym or exploring the city she loves.
