- Rolls Royce stock has risen by nearly double in 2025, with profit taking exerting pressure in recent weeks
- The company recently reiterated its £3.1 billion-£3.2 billion profit guidance for 2025
- The timing of the latest share buyback signals confidence in continued growth despite emerging valuation concerns
Rolls-Royce Holdings plc (LSE: RR.) announced on December 16, 2025, that they’re launching a £200 million share buyback program. It starts on January 2 and ends February 24, 2026, right before their full-year results come out, according to their London Stock Exchange release. The stock is up about 96% so far this year, trading at 1,118p as of this writing. So, what does this mean for the future and the stock price? And will people start taking their profits after such big gains?
Why the Buyback Matters Now
A buyback is often seen as a positive sign from a company’s leaders. Rolls-Royce’s decision indicates that they are generating a lot of free cash. This is due to the recovery of the civil aerospace industry, increased flight hours for large engines nearing pre-pandemic levels, and new defense contracts.
By starting this buyback, Rolls-Royce is telling the market that they are confident in their ability to generate cash, even before the year’s financial results are finalized. This move shows that the company is on a path to recovery and is focused on rewarding its shareholders
The company’s latest buyback affirms a trajectory of recovery and shareholder focus. While profit-taking adds near-term caution after extraordinary gains, the move bolsters confidence, potentially mitigating pressure and supporting further upside in 2026.
Is the Rally Over?
With the stock trading near 1,100p in mid-December, a natural question arises: is it time to take profits? After a nearly 95% gain in 2025, some analysts, suggest that the “easy money” may have been made. Recent dips, with shares off 2-3% from September peaks amid broader market rotation, suggest some locking in profits. However, the fundamental outlook remains sturdy.
Rolls-Royce recently reaffirmed that they still expect to make £3.1 billion to £3.2 billion in profits in 2025. Some investors will probably sell to take profits after such a big climb, but the buyback suggests that Rolls-Royce thinks its own stock is worth buying, even at these high prices. That said, a decisive break below the psychological 1,000p mark would be a major warning sign.
Rolls-Royce Stock Price Prediction
The Relative Strength Index (RSI) is around 56 right now, which means the stock is likely to head upwards. This gives it room to stabilize. Initial resistance will likely be at 1,100p, with a stronger upward push potentially meeting the next hurdle at 1,135p. Its pivot is at 1,099p, which corresponds with the 50-day EMA. If it falls below that level, that could mean a bigger drop is coming. In that case, the first support will likely be at the 1,080p mark.
An extended control by the sellers will break below that level and invalidate the upside narrative. Further down, it could test the second support at 1,063p, beyond which the psychological 1,000p will be within reach.
Rolls Royce stock price daily chart with key support and resistance levels on December 17,2025 created on TradingView
A share buyback reduces the number of outstanding shares, boosting earnings per share and often providing price support by absorbing selling pressure, while affirming management’s view of undervaluation amid robust fundamentals.
A decisive close below the 1,000p psychological level, accompanied by high trading volume, would be a major warning sign.
When a company buys shares after strong gains such as Rolls Royce’s over 90% YTD gains, it shows that the management is confident of its growth outlook and ability to recoup the investment
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