A senior Rolls-Royce executive on Tuesday defended recent price rises and improvements in performance after airlines accused engine makers of profiting from supply chain problems.
Rolls-Royce Holdings plc (RYCEY) is undervalued despite 112% share price growth, driven by skepticism over sustainable earnings and robust long-term demand drivers. Rolls-Royce 's power systems segment is poised for structural growth, leveraging its 15% global backup market share and mtu biofuel capabilities aligned with EU climate goals. The overlooked SMR nuclear segment offers significant long-term upside, with UK government backing, major partnerships, and potential multi-billion-pound investments.
Rolls-Royce retains a Buy rating with a $20.26 price target, reflecting a 16% upside as focus shifts to 2027 earnings. Peer group valuation multiples have contracted, but RYCEY's forward EBITDA and free cash flow estimates have seen modest upward revisions. EBITDA margins are projected to rise from 18.6% in 2025 to 21.6% by 2027, with stable free cash flow conversion around 75%.
RYCEY is up 12.9% YTD, hitting record highs in 2026; diversified ETFs like EUAD offer exposure to the rally while reducing risk from a potential pullback.
The broad theme for Rolls-Royce lately has been one around defense, helping to drive a 1,200% gain over the past five years. Share were on track for a sixth straight day of gains on Friday.
Rolls-Royce Holdings PLC (LSE:RR.) has launched a £200 million "interim" share buyback ahead of its full-year results, after completing a £1 billion scheme last month.
JP Morgan is urging investors not to be spooked by the recent wobble in Europe's aerospace and defence shares, arguing that the fundamentals remain firmly in place and that both civil aviation and defence companies can deliver 15–20% earnings growth a year for the next five years. After several years of outperformance, the sectors have slipped in recent months as money rotated elsewhere.
Dubai-based Emirates will perform maintenance, repair and overhaul for the Trent 900 engines on its A380 aircraft from 2027, under a memorandum of understanding signed with engine maker Rolls-Royce , the airline said on Thursday.
Rolls-Royce Holdings PLC (LSE:RR.) has received cautious backing from analysts at Citi, who believe upgrades to the Trent 1000XE engine could support future market share gains on Boeing's 787 aircraft.
RBC Capital looks a little late to the party with the share price up 83% year-to-date, backed by increased defence budgets and a renewed focus on power generation. Undeterred, the Canadian banks still believe there's a lot to commend Rolls-Royce Holdings PLC (LSE:RR.
The company said strong demand across all its businesses means it is on track to meet its full-year targets.