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Rolls-Royce‘s (LSE:RR.) share price remains one of the FTSE 100‘s star performers over the last year. The engineer’s up 95% in that time, outstripping the broader blue-chip index’s 17% rise.
Could the company be running out of steam though? Strong defence markets and resilience in the global airline industry bode well looking ahead. But I feel these supportive factors may be more than baked into the firm’s valuation, which in turn could limit further price rises.
The average 12-month price target for Rolls-Royce shares is £11.98, up 15% from today’s levels. Given the FTSE stock’s forward price-to-earnings (P/E) ratio of 37 times, I’m not surprised that price action is expected to be more subdued.
I’m looking for more attractively priced growth shares that could outperform Rolls in the near term and beyond. What has my research thrown up?
Softcat
Softcat (LSE:SCT) provides a range of information technology services including cybersecurity, networking, and cloud computing. Its shares have dropped 7.6% over the last 12 months as market confidence has weakened.
City brokers are expecting the FTSE 250 firm to rebound sharply over the next year, however. Their average share price target is £18.10, up 29% from current levels.
I’m not surprised by their bullish opinion. There are risks here, like fears of an AI bubble that could pull all tech shares sharply lower. Softcat also has to beat off significant competition across its service lines.
But I’m confident it can remain an impressive profits grower. Its broad expertise means it continues to defy weak conditions in the tech market — gross invoiced income rose roughly 27% in the 12 months to July. Furthermore, it has a cash-rich balance sheet it can use to capitalise on fast-growing sectors like AI and cloud computing.
City analysts expect Softcat’s long record of earnings growth to continue with a 3% rise this financial year (to July 2026). This leaves it trading on a reasonable P/E ratio of 19.6 times.
Greggs
Greggs (LSE:GRG) has seen its reputation as a top growth stock shredded over the past year. Demand for its desserts, pastries, and drinks has been walloped as consumers have tightened their purse strings.
Ongoing pressures mean the baker’s earnings are tipped for a rare 17% fall in 2025. Trading may remain weaker than usual, too, if the UK economy continues to splutter.
Yet City analysts are confident the bottom-line will rebound from next year. I’m not surprised — new store openings in lucrative destinations like train stations should help turn things around. I’m also hopeful sales will pick up as the minimum wage is hiked for millions of Britons, lifting their disposable income levels.
Forecasts point to a 4% earnings recovery in 2026, and an extra 5% rise the following year. As for Greggs’ share price, the average 12-month price target is £19.31, up 31% from current levels.
I feel Greggs’ undemanding valuation provides scope for its shares to surge again. Its forward P/E ratio is just 12.5 times.