Rolls-Royce Surpasses £70 Billion, Benefiting Thousands on EasyEquities

Shares of Rolls-Royce Holdings Plc have soared in the past few months, up 89% in the past year, trading at an all-time high range benefiting thousands of investors on EasyEquities, with its market value now surpassing £70 billion (market cap) as shares continue their impressive climb.

The aerospace and defence giant is riding a surge of investor confidence, driven by heightened geopolitical tensions that have sharpened global focus on military readiness and advanced engineering capabilities. At the same time, the company is reinforcing shareholder value through a robust share buyback programme and the reinstatement of its dividend, strong signals of management’s confidence in its long-term growth trajectory. Will you be buying shares amid these uncertainties?

Past performance does not guarantee future performance. Market capitalization, or market cap, refers to the total value of a company's outstanding shares of stock and is calculated by multiplying the share price by the number of shares outstanding. 

Numbers supporting Rolls-Royce's share price growth

Momentum in Rolls-Royce’s core business segments remains strong, helping maintain bullish investor sentiment. This is reflected not just in its share price performance, but also in its operational and financial results. In 2024, the Group made significant strides in its transformation strategy, delivering £2.5 billion in underlying operating profit at a 13.8% margin, driven by strategic initiatives, commercial optimisation, and cost efficiencies. Free cash flow reached £2.4 billion, supporting a net cash balance of £475 million at year-end and enabling a full-year dividend of 6.0p (or £0.06), representing a 30% payout ratio and the company authorised a £1 billion share buyback programme. 

Looking ahead to 2025, the company maintains guidance of £2.7 billion–£2.9 billion in both profit and free cash flow, hitting its mid-term targets two years ahead of schedule. 

Rolls-Royce has also raised its 2028 financial targets: up to £3.9 billion in profit, a 17% operating margin, £4.5 billion in free cash flow, and a 21% return on capital. The company recently reported a strong start to the year in its trading statement, with solid performance across all divisions and 2025 guidance reaffirmed. Key business highlights include:

• Civil Aerospace: Engine flying hours rose to 110% of 2019 levels, with strong aftermarket growth and key certifications progressing well.
• Defence: Continued robust demand. 
• Power Systems: Reported strong revenue and order growth, with the next-generation engine on track for 2028. 
• Nuclear: A strategic investment from ČEZ (the Czech Republic’s state utility) and a UK tender submission point to ongoing progress in Small Modular Reactors (SMRs). 

The £1 billion share buyback continues to advance. So far, the company has repurchased 37,567,351 shares at an average price of £7.488361 (748,8361 pence), amounting to approximately £281 million. That leaves about £718 million available under the current programme. 

Buybacks can be executed in two ways: 

• Open Market: The company purchases shares directly from the market. 
• Tender Offer: A formal offer is made to shareholders to sell their shares at a fixed price within a set period. 

Over time, buybacks could support share price appreciation by reducing the number of shares outstanding and may increase dividends for those who continue to hold shares. 

"Our transformation of Rolls-Royce is progressing strongly and we continue to expand the earnings and cash potential of the business. We are creating a more resilient and agile Rolls-Royce that is better equipped to respond to changes in the external environment." 

The recently announced global tariff increases have created a degree of uncertainty for the industry. We expect to offset the impact of announced tariffs on our business through the mitigating actions we are taking. We are closely monitoring the potential indirect impact on economic growth and inflation and will continue to take the necessary actions.” Rolls-Royce Holdings Plc's chief executive said, addressing shareholders

Investors will be watching closely as the company prepares to release its half-year results in July.

Conclusion 

Investors should remain cautiously optimistic about Rolls-Royce’s strong momentum, but keep a close eye on valuation levels, the execution of its ambitious transformation strategy, and the sustainability of its cash flows amid evolving geopolitical dynamics. While the ongoing £1 billion share buyback and reinstated dividend reflect management’s confidence, the true test lies in whether the company can consistently meet its upgraded financial targets through 2025 and beyond.