It was amazing a few years Rolls-Royce (LSE: RR) Price of shares. Over the past five years, the price of Rolls-Royce has increased 2927%. This type of performance would be extraordinary for every supply. But this is unique in the case of a well -established Blue Chip company, operating on the mature market.

After achieving these results in the last five years, can an air engineer be able to do it again in the next five years?

The base line matters

It cannot be denied that the price of Rolls-Royce has recently been in objective conditions. He recently reached another level of all time.

However, it is crucial to think subjectively and also objectively. One of the reasons why he did so well in five years, is that it was in Doldrums five years ago.

Pandemia sent the demand for civil aviation much lower, leading airlines to cancel or postpone the purchases of aircraft, while the engine service cycles were stretched.

Rolls-Royce shares sold for pennies in 2020, and yet the company issued billions more in what seems to be the price of the opportunity, because it really needed to boost liquidity.

However, business is doing very well now. It has been observed that revenues are growing, are solidly profitable and provided for improving financial results over time.

The law of huge numbers

The boost in stock price in recent years means that Rolls-Royce now proves market capitalization of only 100 billion pounds. So if the price of the shares was to boost by another 2,927% in the next five years, market capitalization would probably be just over 3 -TRNs. It may be a bit lower because Rolls vacuums some of its own actions, but let’s call it a 3 -Funt round.

This is not impossible to capitalize for the company: Nvidia It currently has market capital in the amount of over 3 % of pounds.

But the British stock market is a more sleeping place than New York. Currently, the British company with the largest market captain is AstrasenecAt 193 billion pounds (Rolls-Royce is fifth).

I just don’t think that the market 3-pound market capital is realistic for every British company in the next five years.

Higher valuation potential

One of the arguments for this argument is that if the Rolls earnings grow quickly enough, its valuation can do the same. This may be true.

Currently, the share price indicator for Rolls-Royce is 17. The basic operating profit increased by 50% year-on-year in the first half. The company expects this number to boost to 3.6 billion GBP-3.9 billion GBP in the medium period. This would constitute 46% -54% compared to last year’s numbers.

If he achieves this goal, I see a higher Rolls-Royce share price than today.

But high expectations are already baked, and growth growth is not close to what you need to do to justify a 29-fold boost in stock price, as I see.

Watching, no purchase

I like business. It has a unique technology, narrow competition and a huge customer base. I also like his growth prospects.

But the current price assumes a lot. From previous experience, we know that sporadic unexpected decreases in passenger demand may wreak havoc with the economy of engine manufacturers.

Meanwhile, investors’ expectations now seem so high that all notes of the worse Rolls-Royce results could see the decrease in stock price. I will not invest.