The Rolls-Royce (LSE:RR) share value has been on an absolute tear within the final 12 months, rising 163.3%. After nearing chapter in 2020, the enterprise has posted a powerful revival.

It has carried this nice type into 2024. 12 months thus far, it’s up 34.7%. That makes it probably the greatest performers on the FTSE 100.

However as traders, we shouldn’t dwell an excessive amount of on the previous. It may well assist us make extra knowledgeable selections. Nonetheless, it’s the place a Inventory has the potential to go within the instances forward that’s extra necessary.

With that in thoughts, the place may Rolls finish this 12 months?

A pull again?

As I highlighted above, the inventory has been gaining critical momentum within the opening months of this 12 months. Nonetheless, I’m apprehensive that we may see a share value correction in 2024.

As I write, a share within the British icon would set me again £4.05. I don’t see that pretty much as good worth for cash.

However why do I say this? Effectively, I believe the inventory seems to be costly. It trades on near 30 times earnings. For comparability, the Footsie common is round 11.

To go together with that, the trade that Rolls operates in is risky. International conflicts have the potential to significantly hinder its operations. There are different exterior components to contemplate as effectively, reminiscent of demand for journey and occasions such because the pandemic.

Predicting when and by how a lot a inventory might fall is nigh on unattainable. That mentioned, I wish to discover a couple of potential situations.

A ten% fall from its present value would go away its share value sitting at £3.65. We’ve seen the Rolls Royce share value fall beneath the £4 mark in latest weeks. I believe there’s the potential that it finishes 2024 someplace between these two factors.

In keeping with MarketScreener, the low value goal for analysts masking the inventory is £2.40. Whereas I don’t count on it to swoop anyplace close to that low, I reckon we may see Rolls pulled again barely this 12 months.

I’m cautious market hype has pushed up the inventory. The enterprise has a historical past of great swings in earnings from 12 months to 12 months. Ought to earnings take a success in 2024, this might see some shareholders panic.

May I be improper?

Then once more, there’s all the possibility I could possibly be improper. If Rolls carries on with its robust turnaround, its value may maintain rising.

That’s very true given the work CEO Tufan Erginbilgiç has executed. Final 12 months noticed underlying working revenue leap 144% to £1.6bn underneath his reign. Free money move additionally climbed 155% to £1.3bn. Wanting forward, Erginbilgiç needs earnings nearer to £2.8bn by 2027.

What I’m doing

I like the place Rolls is heading as a enterprise and, over the long run, I count on the corporate to proceed to prosper. However I gained’t be shopping for its shares immediately. They’re just too costly for my liking.

There’s loads of buzz surrounding the corporate and its spectacular rise in the intervening time. And that worries me.

I’ll be protecting an in depth eye on the Rolls share value for the rest of 2024. If the inventory recoils to a extra wise value that I’m prepared to pay, then I’ll add it to my portfolio.