This month, an aviation engineer Rolls-Royce (LSE: RR) Move in a well -known direction: up. The price of Rolls-Royce has reached another highest level.

This means it’s amazing now 1 471% Higher than five years ago.

Rated – or undervalued?

This means that the ratio of Rolls-Royce shares for profit (p/e) is currently 39.

It looks pricey to me. After all, these are not some heated growth actions, but a mature company in a mature industry.

However, as a higher price of shares has shown, in recent years, at least some investors believe that Rolls look low-cost, not pricey.

Could they be right?

Probably. Finally, the company has improved financial results, in particular in recent years. He set up and then raised the demanding goals.

If it is still fine, earnings can grow. This year, the company is now expecting an operating profit of 3.1 billion GBP-3.2 billion GBP, compared to 2.5 billion GBP last year and 1.6 billion GBP a year earlier.

Rolls also uses external factors such as an raise in demand. The demand for civil aviation remains floating. Defense expenditure is also in a robust growth mode, while the company’s power supply department is riding a wave of demand, which looks like for years.

The price may seem foam – but is it true?

On this basis, I believe that there is a potential justification for the Rolls-Royce share price, which stood where it does.

In fact, if he still achieves his goals and there are no nasty surprises along the way, I could imagine that we could see how even higher participation in the movement.

Despite this, this amazing profit in the last five years and its current valuation gives me a reflection on whether the price of Rolls-Royce shares is foam. The same can be asked for a wider market. Like rolls, FTSE 100 Until now, he has set many records.

However, I do not think that rolls are a useful barometer of what is happening to the wider market.

In the end, his activities have really undergone performance transformation over the past five years. He has proven business and enormous profits.

I think that many reasons for the dramatic change in the Rolls-Royce share price are specific to his activities and cannot be used in a wider stock market.

I don’t mind missing

Despite this, I have no investment plans – and this suits me well, even if it means that I am finishing my further benefits from the share price.

Why, considering that I see an argument for participating in above? In tiny: valuation.

Rolls fought at various points in the past, because the demand of civil aviation suddenly fell from the cliff. Indeed, the five -year chart of share prices looks so partly, because five years ago the civil aviation sector fought for pandemic demand.

I see the risk of further unexpected demand in the future, maybe eating Rolls’s revenues and profitability. It seems to me that the current price of Rolls-Royce shares does not reflect this risk accordingly.