Rolls Royce Share Price Soars as Valuation Nears £100 Billion
The Rolls Royce share price surged to new heights yesterday, with the engineering giant’s market value racing towards the landmark £100 billion mark for the first time in its 119-year history.
Investors were treated to a stellar trading day as shares jumped by as much as 12%, extending gains for the year to more than 85%.
The company, now worth £89.5 billion, has climbed over 1,000% since Tufan Erginbilgic, nicknamed “Turbo Tufan,” took the helm in early 2023, when its market capitalisation stood at just £7.9 billion. That meteoric rise has made Rolls-Royce the fifth-largest firm on the London Stock Exchange.
The latest rally followed an upbeat profit forecast, fuelled by strong demand for the company’s engines, from powering commercial airliners to military fighter jets.
Erginbilgic now expects annual profits to land between £3.1 billion and £3.2 billion, up from previous guidance of £2.7 billion to £2.9 billion.
This confidence comes on the back of a robust first-half performance. Profits leapt 50% to £1.7 billion, while revenues climbed 11% to £9.1 billion.
“Having already delivered a stellar turnaround, Rolls is showing no signs of taking its foot off the pedal,” said Russ Mould of AJ Bell. “Rolls is the poster child for what’s capable on the stock market – a welcome reminder that Britain has plenty of business champions.”
The turnaround story is rooted in strategic moves to tackle supply chain snags, tariff pressures, and operational inefficiencies. According to Erginbilgic, the company is firmly on track to hit profits of up to £3.9 billion by 2028.
The post-pandemic recovery in international air travel has been a key driver. In the first half of the year, the firm improved the durability of its engines, increasing the time they remain “on wing”, the period before maintenance is required. Rolls expects its Trent engines to see an 80% boost in flying hours by 2027.
Persistent issues with the Trent 1000, which powers Boeing’s 787 Dreamliner, have disrupted carriers such as British Airways and Virgin Atlantic.
However, an upgraded blade, certified in June, should more than double operational time, with engines potentially staying on wing for six years.
On dealing with US tariff challenges, Erginbilgic remarked: “By February, we were ready. We didn’t know what to predict. In an uncertain world, my personal belief is that a company’s job is not to predict what’s going to happen but to gear up to respond.
Our processes were aligned before tariff numbers hit, we were very quick to go to the mitigations.”
For shareholders, the past 18 months have been nothing short of extraordinary. And with the Rolls Royce share price still on the climb, the city will be watching closely to see if the £100 billion milestone finally falls in the coming weeks.
