Rolls-Royce's share price is down 10% from a 52-week high. Is this a buy dip?

Since then Company Rolls-Royce Holdings (LSE: RR.) share price started last year, I have been waiting for it to bounce back and give me a cheap buying opportunity.

But trying to time things like that can be a mug's game, and those who bought it did very well. Still, shares are down 10% from their 52-week high in June.

What's next?

This may be a break before the first half results, which are due on 1 August. What happens when we see statistics can drive Rolls-Royce shares forward. If things go in line with the previous bullish direction, that is.

But what if there is a mistake? However, there is an opportunity that could send stocks further into buying territory.

One thing is for sure, there are a lot of people watching. An investor affiliated with the investment platform says that Rolls was its third most popular stock bought in June.

Those buyers will be expecting good things, for sure. But what could those things be?

The idea of ​​Rolls-Royce

During the FY 2023 results, CEO Tufan Erginbilgiç was very enthusiastic. He spoke “we unlock our full potential as the most efficient, competitive, strong and growing Rolls-Royce..”

The board gave guidance of £1.7bn-£2.0bn in operating profit for 2024, and put free cash flow at £1.7bn-£1.9bn.

With 2023 underlying operating profit of £1.6bn, we are looking at an increase of between 6% and 25%, and that is the range. I've seen investors disappointed with only 6% growth, even if it's still within guidance.

Free cash flow guidance suggests an increase of around 30-45% over £1.3bn by 2023. That would be impressive, but it's still a broad list.

Uncertainty

In the first phase, there will always be uncertainty with guidance statistics such as these.

But you know what I think will be on the minds of many Rolls-Royce shareholders? I think they will be waiting for the higher end of the range. They will want at least 25% more operating profit, and they will not be happy with a 6% increase.

At the May 23rd AGM trade review, the CEO spoke “more confidence in our 2024 guidance“. And that will certainly strengthen hope.

But you know what I choose? I'd rather see a company manager who under-promises and over-delivers. That way, investors are less likely to be overly optimistic. And I will not be disappointed if the results are good but not good.

The results of H1

What can I expect from the upcoming H1 update? Considering how recent the AGM review was, I suspect that Rolls will remain firm about its direction. And we may not get the big buying dip that I hope for.

But I'll hold off, as I still think Rolls could fall if it hits the low end of FY expectations.

I do not expose the risk of buying Rolls-Royce, at least until it is not on the list of the most bought stocks on popular investment forums.