- RR shares edged up today as the company continues its £200 million interim buyback, set to expire on Feb 24.
- Civil Aerospace head Rob Watson is aggressively defending price hikes against airline backlash.
Rolls-Royce (LSE: RR) continues to prove why it is the premier “turnaround king” of the London Stock Exchange. Shares nudged higher in early trading this morning, peaking at 1,250.5p, as the company maintains its aggressive £200 million interim buyback programme. This program, which is scheduled to conclude by February 24, acts as a liquidity “bridge” leading into the highly anticipated annual report.
However, as the company enters a pivotal February, that momentum is being tested by a combination of high-stakes diplomacy in Asia and rigorous capital allocation back in London.
Rolls-Royce Share Price Outlook: Buyback “Bridge” Leads to February 26 Results
On Wednesday, Rolls-Royce shares nudged higher to 1,250p following a regulatory filing confirming the purchase of 270,818 ordinary shares as part of its ongoing £200 million interim programme. This initiative is a strategic “interim” move designed to support the share price ahead of the Full-Year 2025 results on February 26.
The market is looking for more than just routine buybacks. According to Bloomberg, investors are scanning these filings for a “gauge of daily market mood,” questioning if the company can maintain this pace of cash returns while navigating a tightening supply chain.
Rolls-Royce Profit Engine Under the Spotlight at the Singapore Airshow
The most significant headwind right now isn’t the balance sheet, it’s the customer. At the Singapore Airshow, Rolls-Royce’s civil-aerospace head Rob Watson was forced to push back against claims from IATA that engine makers are “cashing in” on global supply-chain woes. Watson’s defense, that “pricing has to some extent been a function of cost”, is a high-stakes play to protect the long-term service contracts that provide the bulk of Rolls-Royce’s profits.
To appease massive buyers like Emirates, Rolls-Royce is touting a 60% increase in “time on wing” for the Airbus A350-1000 engines. As reported by Reuters, these durability improvements are the “carrot” meant to justify the “stick” of higher prices.
Is The Rolls-Royce Rally Overextended?
Despite the tailwinds in Defense and AI Power Systems, some experts are sounding the alarm. The Motley Fool recently highlighted that the stock’s forward P/E ratio of 38 is “miles above the 10-year average of 15,” warning that the “good news is currently baked into the price.”
Key Dates for Your Diary:
- 19 Feb 2026: Airbus Earnings (A lead indicator for RR)
- 24 Feb 2026: Conclusion of £200m Buyback
- 26 Feb 2026: Rolls-Royce Full-Year Results
Conclusion: A Reality Check for the “Turnaround King”
Rolls-Royce is no longer a “cheap” recovery play; it is a premium growth stock that must deliver perfection on February 26. While the buybacks provide a floor, the real driver will be management’s ability to prove that the durability gains in Singapore will translate into record-breaking free cash flow for 2026.
Rolls Royce FAQs
Because Rolls-Royce makes its money from service contracts, not just selling engines. If airlines like Emirates successfully push back on pricing, the company’s profit margins will shrink, making the current high share price impossible to sustain.
Analysts warn that at 1,242p, the stock is “enormously expensive.” They suggest that even a “good” earnings report might not be enough to prevent a correction if the market was expecting “great” results.
The company is buying and canceling these shares, which reduces the total number of shares in the market. This makes your remaining shares more valuable by increasing the “Earnings Per Share” (EPS).