Rolls-Royce guidance hike gives further boost to shares
A fresh update from the aero engineer has got investors excited again. ii's head of investment explains why.
30th July 2026 09:20
by Victoria Scholar from interactive investor
Rolls-Royce Holdings (LSE:RR.) sharply improved its full-year outlook – it now expects underlying operating profit of between £4.7 billion and £4.9 billion, up from around £4 billion to £4.2 billion. It also announced better-than-expected first-half earnings which soared by 46% to £2.5 billion with strength across civil aerospace, defence and power.
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The company has benefitted from the backdrop of heightened geopolitical uncertainty and growing government defence budgets. Civil aerospace profitability has improved too. Rolls has another growing string to its bow – it is becoming to some extent a picks-and-shovels AI infrastructure play as its power division benefits from data centre demand.
Shareholders couldn’t have hoped for a better turnaround since the appointment of CEO Tufan Erginbilgic at the start of 2023. The stock has enjoyed a meteoric ascent and confidence in the company has skyrocketed. The company is returning cash to shareholders too through its share buyback announced in February. No longer a burning platform, Rolls-Royce is firing on all cylinders.
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Rolls Royce has soared to the top of the FTSE 100 leaderboard Thursday, gaining over 4% and landing the stock up close to 20% year-to-date, sharply outperforming the FTSE 100 which hit a record high on Wednesday.
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