- Rolls Royce share price's strong upward trajectory is firmly back on track thanks to the thawing of trade tariff fears.
Rolls Royce share price has been on the upside for the last month, gaining 13.74% in that time. It was up by 0.9% and traded at 792p at the time of writing, returning to the upside after registering losses in the previous two successive sessions. The company’s financials are strong, with its free cash flow expected to be between 2.7 billion-2.9 billion by the end of 2025.
Its growth trajectory is primarily thanks to a strong demand for its engines from the aviation industry, as well as defense and Small Modular Reactors (SMR) contracts from governments. The resolution of trade tariff dispute between the United States and her trading partners is also a major breakthrough that will provide tailwinds to Rolls Royce share price in the near-term.
Global civil aviation industry has been experiencing strong growth, with passenger numbers going past pre-pandemic levels. That has resulted in increased orders for Rolls Royce (LSE: RR.) engines as growth outlook remains robust. The company makes a significant portion of its revenues from servicing of engines, expressed in Engine Flying Hours (EFH). At the end of Q1 2025, it reported that its EFH rose to 110% of the 2019 levels. That figure is projected to grow to 115% by the end of 2025.
Rolls Royce share price upside is also supported by strong defense spending. Multiple geopolitical conflicts across the world have certainly increased the likelihood of more orders for the company’s fighter jet engines. Meanwhile, the company spent $138 million of the $1 billion share buyback program as of March 31, with the balance set to be spent in the remaining portion of the year.
In the medium and long term, Rolls Royce share price will also be supported by rising inclination to SMRs. It currently has ongoing contracts with the UK Government, Czech Republic Government and Siemens Energy.
Rolls Royce Share Price Prediction
The momentum on Rolls Royce share price favours the buyers to stay in control if the action stays above 787p. It will likely encounter the first resistance at 797. However, an extended control by the buyers will break above that mark and test 805p.
On the other hand, the momentum will swing to the downside if the price breaks below 787p. If that happens, the first support is likely to be at 780p. The upside narrative will be invalid if the price breaks below that level. The resulting momentum could take the price lower to test 772p.
