Portfolio Spotlight: Adding Rolls-Royce ( $RR.L ) to the portfolio

Yesterday I opened a new position in Rolls‑Royce Holdings. I had this stock on my watchlist for some time with a planned entry at 1170 GBP, which has now been reached. I entered with a position size of 1% of the portfolio and have set a target price of 1380 GBP.

(As usual, I wanted to include the company’s interactive chart for illustration, but it’s not available on Bulios. I’m therefore only attaching a generated image.)

Rolls‑Royce is one of the leading global players in aviation and the defense industry. It is best known for the Trent engines, power systems, and marine propulsion solutions.

Main advantages of Rolls‑Royce:

Strong recovery in civil aviation - The number of flights and the utilization of wide‑body aircraft are increasing, which raises demand for Trent engine maintenance — and service is a key source of recurring, high‑margin revenue for the company.

Large order backlog - A backlog exceeding £100 billion provides very good visibility of future revenues for several years ahead.

Exposure to the defense industry and new technologies - The company benefits from rising defense spending and is developing projects such as small modular reactors, which could be a significant growth segment in the future.

Key risks:

Higher indebtedness - The company still carries debt from the pandemic period, which limits financial flexibility.

Execution risk - Large and technologically complex projects carry the risk of delays or higher costs.

Industry cyclicality - The aerospace sector is sensitive to the economic cycle — an economic slowdown or supply‑chain issues can significantly slow growth.

Comparison with competitors:

Compared with companies like GE Aerospace, Safran or Honeywell, Rolls‑Royce has a strong position especially in the wide‑body aircraft segment and a higher share of revenues from aftermarket services. GE has broader diversification and Safran a stronger balance sheet, but Rolls‑Royce currently offers very interesting growth potential thanks to the ongoing post‑pandemic engine maintenance cycle.

For me, this is a well‑timed entry into a quality company with long‑term potential.

What do you think? Are you adding aerospace to your portfolio, or do you prefer to avoid this sector?

The English version of this post is available on my profile on www.etoro.com. If you want to follow me there or possibly copy my USD portfolio, I’d be very happy!