The roar of jet engines is echoing all the way to the balance sheet. Rolls-Royce $12 Billion Buyback plans electrified markets Thursday as the British aerospace and power systems giant forecast more than £4 billion ($5.42 billion) in profit this year and signaled another chapter of muscular growth.
Shares jumped as much as 7% in early trading before settling up 4.5%, putting the stock on course for a fresh record after already notching multiple highs this year.
Profits Accelerate Ahead of Schedule
Rolls-Royce said it is targeting underlying operating profit of between £4 billion and £4.2 billion in 2026 — comfortably above the £3.65 billion midpoint expected by analysts surveyed by FactSet. Free cash flow is projected at £3.6 billion to £3.8 billion, also beating expectations.
The bullish outlook means the company now expects to hit the upper range of its prior mid-term guidance two years earlier than planned, CEO Tufan Erginbilgic said.
“Our transformation continues with pace and intensity,” Erginbilgic said in a statement, underscoring the speed of the company’s turnaround.
The group upgraded its 2028 targets to £4.9 billion to £5.2 billion in underlying operating profit, an operating margin of 18% to 20%, and free cash flow between £5 billion and £5.3 billion. Looking beyond that horizon, Erginbilgic pointed to tailwinds from artificial intelligence, the global energy transition and rising defense spending.
