How lengthy will it take for the Rolls-Royce Holdings (LSE: RR.) share price to achieve 300p, 400p, 500p? That’s what many people have requested ourselves over the previous 12 months.

Each time, the reply was the identical. Earlier than we predict.

Rolls has already been above 500p, and is hovering round that stage as I write. So how quickly will we see 600p?

I’m going out on a limb to say I don’t assume the price will get that far this 12 months. In reality, I see an excellent probability that Rolls-Royce might finish 2024 considerably decrease than right this moment.

Guesswork

Let me qualify that. Guessing at which method a share price would possibly go within the brief time period will not be a great way to decide on an funding. Individuals who strive it have a tendency to finish up incorrect as typically as they’re proper.

So, I’m making no precise predictions right here. That is only for enjoyable, based mostly on previous expertise with development shares, and some instincts as to what would possibly occur. And I’m not going to let my persistent lack of ability to foretell share costs put me off.

In reality, I believe Rolls-Royce may very well be a pleasant long-term funding proper now. Even after its staggering price rise. And even when it ought to fall within the brief time period.

The great things

Why am I upbeat concerning the long-term future? With the share price up round a fiver, we’re taking a look at a ahead price-to-earnings (P/E) ratio of 28.

Sure, that’s about twice the long-term FTSE 100 common. However we might see it down to 22 based mostly on 2026 forecasts. And if development prospects carry on as sturdy as they’re now, it might become good worth.

Then once more, the PEG ratio is a well-liked strategy to examine the P/E valuation with anticipated earnings development. Buyers prefer it to be underneath one, ideally lower than 0.7. However for the 2025 12 months, it’s up at 2.4 at Rolls.

That might imply there’s an excessive amount of development expectation already constructed into the share price.

Sentiment

My foremost purpose for pondering the Rolls-Royce share price might fall earlier than year-end comes down to investor sentiment. And that’s based mostly on years of development inventory investing once I was youthful.

Finally, development (or simply expectations) will sluggish. That’s inevitable, in any other case an organization might ultimately grow to be infinitely giant.

A slowdown in development has nearly all the time meant a downward share price score, no less than within the development shares I’ve watched.

It won’t be for a lot of years, or expectations might cool on the subsequent quarterly replace.

Inventory market

There’s one other issue too. It’s falling rates of interest, and a brighter outlook for monetary and different shares.

If I’d purchased Rolls-Royce earlier than the price sky-rocketed, I believe I’d be seeking to take some revenue and put it into banks, insurers or home builders whereas they’re nonetheless low cost. Others would possibly nicely try this.

Nonetheless, on the finish of the day, possibly that is simply me wishing for a fall and a brand new shopping for alternative, to make up for all those I’ve missed.