Rolls-Royce HoldingsRYCEY +0.65%70 Interest Coverage is 17.89 as of Dec. 2025, which is 253% above its 10-year median of 5.07. GuruFocus rates RYCEY with a GF Score™ of 70/100 and a GF Value™ of $8.42 (Significantly Overvalued). The stock has 5 warning signs investors should review. Among 241 Aerospace & Defense companies, Rolls-Royce Holdings ranks better than 66.8% on this metric.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's
Operating Income
by its Interest Expense. Rolls-Royce Holdings's
Operating Income
for the
six
months ended in Dec. 2025 was $3,162 Mil. Rolls-Royce Holdings's Interest Expense for the
six
months ended in Dec. 2025 was $-177 Mil.
Rolls-Royce Holdings's interest coverage for the quarter that ended in Dec. 2025 was 17.89.
The higher the ratio, the stronger the company's financial strength is.
The historical rank and industry rank for Rolls-Royce Holdings's Interest Coverage or its related term are showing as below:
RYCEY'
s Interest Coverage Range Over the Past 10 Years
Min: 1.86 Med: 5.07 Max: 14.61
Current: 14.61
RYCEY's Interest Coverage is ranked better than 66.8% of 241
companies
in the Aerospace & Defense industry
Industry Median: 8.69
vs RYCEY: 14.61
Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.
Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .
Rolls-Royce Holdings Interest Coverage Related Terms
Rolls-Royce Holdings Interest Coverage Historical Data
* Premium members only.
The historical data trend for Rolls-Royce Holdings's Interest Coverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.
RYCEY vs GE, RTX, BA: Interest Coverage Comparison
For the Aerospace & Defense subindustry, Rolls-Royce Holdings's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Rolls-Royce Holdings Interest Coverage vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Rolls-Royce Holdings's Interest Coverage distribution charts can be found below:
* The bar in red indicates where Rolls-Royce Holdings's Interest Coverage falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Rolls-Royce Holdings (RYCEY) has a Interest Coverage of 17.89 as of Dec. 2025. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Rolls-Royce Holdings and its competitors. This is 253% above median its historical median of 5.07. Over the past decade, Rolls-Royce Holdings' Interest Coverage has ranged from 1.86 to 14.61. According to the industry distribution chart, Rolls-Royce Holdings ranks #80 out of 241 companies in the Aerospace & Defense industry, placing it in the top 33.2%.
Is Rolls-Royce Holdings' Interest Coverage too high?
Rolls-Royce Holdings' current Interest Coverage of 17.89 is 253% above median its 10-year median of 5.07. Over the past 10 years, this metric has ranged from a low of 1.86 to a high of 14.61. The Aerospace & Defense industry median Interest Coverage is 8.69. Rolls-Royce Holdings' value of 17.89 is 105.9% above this industry median. Based on the distribution chart, Rolls-Royce Holdings ranks #80 out of 241 companies in the Aerospace & Defense industry, which is above the industry midpoint. Overall, Rolls-Royce Holdings has a GF Score™ of 70/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Rolls-Royce Holdings' Interest Coverage compare to GE and RTX?
According to the Aerospace & Defense industry distribution chart, Rolls-Royce Holdings ranks #80 out of 241 companies for Interest Coverage. This puts Rolls-Royce Holdings in the upper half of its industry. The industry median Interest Coverage is 8.69. Rolls-Royce Holdings' value of 17.89 is 105.9% above this benchmark. Historically, Rolls-Royce Holdings' own Interest Coverage has ranged from 1.86 to 14.61 over the past decade. While the company's 10-year median is 5.07 vs. the industry median of 8.69, Rolls-Royce Holdings has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Interest Coverage for an Aerospace & Defense company?
The median Interest Coverage among Aerospace & Defense companies is 8.69, based on 241 companies in the industry. Companies in the top quartile (top 25%) have a Interest Coverage significantly above this median, while those in the bottom quartile fall well below. However, Interest Coverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Rolls-Royce Holdings's current Interest Coverage of 17.89 is 105.9% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Interest Coverage mean?
A high Interest Coverage can signal that a stock is expensive relative to its fundamentals. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on Rolls-Royce Holdings and its competitors. For the Aerospace & Defense industry, the median Interest Coverage is 8.69 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Rolls-Royce Holdings's current Interest Coverage is 17.89, which is 253% above median its own 10-year median of 5.07. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Rolls-Royce Holdings stock overvalued right now?
Based on GuruFocus' analysis, Rolls-Royce Holdings (RYCEY) is currently considered Significantly Overvalued. The stock's GF Value™ is $8.42, compared to a current price of $18.65 — trading 121.5% above its estimated fair value. The current Interest Coverage is 17.89, which is 253% above median its 10-year median of 5.07 and 105.9% above the Aerospace & Defense industry median of 8.69. Rolls-Royce Holdings' overall GF Score™ is 70/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Interest Coverage calculated?
Interest Coverage is calculated from a company's financial statements. For Rolls-Royce Holdings (RYCEY), the current Interest Coverage is 17.89 as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Rolls-Royce Holdings (RYCEY) Overvalued in 2026?
Based on GuruFocus' analysis, Rolls-Royce Holdings stock appears to be overvalued.
The current stock price of $18.65 is trading 121.5% above its estimated GF Value™ of $8.42.
GuruFocus considers Rolls-Royce Holdings to be Significantly Overvalued.
Key valuation signals for RYCEY:
Interest Coverage: 17.89 (253% above median its 10-year median of 5.07)
GF Value™: $8.42 vs. price of $18.65 (121.5% above fair value)
Industry Position: 105.9% above the Aerospace & Defense median (#80 of 241)
No single metric tells the full story. See the RYCEY stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Rolls-Royce operates three core business segments: civil aerospace, power systems, and defense. The civil aerospace segment builds engines powering wide-body aircraft, regional and business jets, and offers aftermarket services. Twenty years ago, the firm pioneered full-service flight hour contracts with the TotalCare package. Power systems provides power solutions to multiple end markets (defense, agriculture, marine, and power generation) while the defense business provides military, ground vehicle and naval propulsion solutions.
70GF Score
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