Rolls-Royce Share: Buyback Boosts
Rolls-Royce has seen its stock price climb steadily in recent months, now trading just below a 52-week high. The company’s latest share buyback programme and a fresh investment-grade rating have bolstered investor confidence.
The engineering giant announced a new £200 million share buyback on 2 January 2026, set to run until 24 February. This follows a larger £1 billion repurchase completed in November 2025, signalling strong cash flow and a focus on returning value to shareholders.
In November 2025, Moody’s upgraded Rolls-Royce to investment grade (Baa1), a move likely to reduce refinancing costs and improve financial flexibility. The upgrade came as the company benefited from rising European defence spending and a robust recovery in civil aviation.
Analysts have taken note of the improved outlook. Bank of America raised its price target for the stock to 1,615 pence, citing better prospects for shareholder returns and free cash flow. While no single firm has publicly set a target of £1,615, the highest forecast among analysts now stands at that level, with an average 12-month target of 1,215.89 pence.
The stock’s recent performance reflects this optimism. Shares have risen by roughly 2.7% in the latest trading sessions, outperforming many FTSE 100 peers. Year-to-date gains now exceed 80%, though the price-to-earnings ratio sits at around 56x—well above historical averages.
Attention now turns to the full-year results, due in late February 2026. Investors will be watching for further signs of growth in defence and aviation, the two key drivers behind Rolls-Royce’s recent momentum.
The combination of share buybacks, an upgraded credit rating, and strong sector trends has lifted Rolls-Royce’s stock. With defence budgets expanding and air travel demand recovering, the company’s financial position appears more stable. The upcoming full-year results will provide the next test of whether this growth can be sustained.
