Rolls-Royce Holdings plc (LSE: RR.) ends 2025 with its share price still hovering close to record territory—despite the kind of thin, holiday-shortened trading that can make even big-cap moves look a little surreal. On the London Stock Exchange, the shares last closed at 1,149.50p on 24 December 2025 (Christmas Eve), after opening at 1,160.50p. [1]
The bigger story for investors into 2026 isn’t a single day’s tape action, though. It’s a cluster of high-signal developments now sitting on top of Rolls-Royce’s multi-year turnaround narrative:
- A fresh £200 million interim share buyback that bridges the gap to full-year results in February. [2]
- Management reaffirming 2025 guidance for profit and free cash flow, while describing strong demand across civil aerospace, defence and power systems. [3]
- Political and industrial momentum behind Small Modular Reactors (SMRs)—including the UK’s Wylfa site decision and new signs of European demand (Sweden’s Vattenfall has shortlisted Rolls-Royce SMR). [4]
- A defence-program milestone in the US: Rolls-Royce has begun AE 1107F engine testing for the Army’s MV‑75 FLRAA tiltrotor programme. [5]
- A clear “picks and shovels” angle to the AI boom via Power Systems and data-centre backup generation—plus a growing emphasis on environmental disclosures (EPDs) that matter more to hyperscalers and regulators each year. [6]
Below is a detailed, publication-ready roundup of the latest Rolls-Royce stock news, forecasts, and the most important debates investors are carrying into 2026—based on information available as of 25 December 2025.
Where Rolls-Royce stock stands heading into 2026
With UK markets shut on Christmas Day, the latest meaningful “as-of” price points come from the last sessions before the holiday break. MarketWatch reported that Rolls-Royce shares finished 24 December at £11.50, and noted the stock was sitting about 3.9% below a 52-week high of £11.96 set on 29 September 2025. [7]
That same update also captured how quiet the market can get in late December: trading volume was reported at about 2.3 million shares, far below the 50‑day average cited by MarketWatch. [8]
Why that matters: after a huge run, low-liquidity sessions can exaggerate moves and “paint” technical patterns that disappear once normal volume returns. In other words, Christmas-week price action is trivia; what follows next is not.
The headline corporate catalyst: a £200m interim buyback before results
On 16 December 2025, Rolls-Royce announced an interim irrevocable, non-discretionary share buyback programme of up to £200 million. [9]
Key details investors are watching:
- The company said the interim programme follows completion in November 2025 of its £1 billion buyback programme for 2025. [10]
- The interim programme is expected to run from 2 January 2026 and complete no later than 24 February 2026. [11]
- Rolls-Royce expects to communicate its full-year 2025 results on 26 February 2026. [12]
- UBS (London Branch) is contracted to execute purchases, with trading decisions made independently within agreed parameters. [13]
- Shares repurchased under the programme will be cancelled, explicitly framing the action as share-capital reduction. [14]
For sentiment, buybacks do two things at once: they support demand mechanically, and they signal that management believes the balance sheet (and forward cash generation) can handle meaningful shareholder returns. Rolls-Royce also reiterated in the same release that the total quantum of 2026 buybacks remains subject to board approval and is expected to be announced alongside the FY25 results. [15]
Management’s latest operating picture: guidance reaffirmed, civil aerospace demand still strong
In its 13 November 2025 trading update (covering performance to 31 October 2025), Rolls-Royce’s CEO said performance was in line with expectations and reaffirmed full-year 2025 guidance for:
- Underlying operating profit:£3.1bn to £3.2bn
- Free cash flow:£3.0bn to £3.1bn [16]
That guidance has become a kind of “gravity well” for the equity story: it anchors buybacks, shapes credit perceptions, and sets the bar for February’s results.
Operationally, the company pointed to civil aerospace strength, including:
- “Significant” large engine orders in the second half (examples named include IndiGo, Malaysia Airlines and Avolon). [17]
- Large engine flying hours for the first 10 months of 2025 up 8% year-on-year and reaching 109% of 2019 levels—a key data point because flying hours drive the long-term service agreements that power cash flow. [18]
- Progress on durability: Rolls-Royce said an upgraded Trent 1000 HPT blade (certified in June) more than doubles time-on-wing for that engine, and is being fitted across the MRO network. [19]
- Further durability upgrades for the Trent 1000 and Trent 7000 were described as on track for certification by the end of 2025, with an expected additional time-on-wing improvement of about 30%. [20]
Reuters’ reporting around that same period echoed the guidance confidence, while also flagging the real-world constraint investors keep circling back to: persistent aerospace supply-chain bottlenecks. [21]
Defence: MV‑75 FLRAA engine testing is a real milestone (and a real market)
On 16 December 2025, Rolls-Royce announced it had begun AE 1107 engine testing to support prototype delivery for the US Army’s MV‑75 Future Long Range Assault Aircraft (FLRAA) programme. [22]
The company said:
- Each MV‑75 is expected to be equipped with two AE 1107F engines. [23]
- Testing is underway at its Indianapolis facility, and Rolls-Royce highlighted more than $1 billion invested over the past decade in technology upgrades, facilities and test capabilities supporting US Department of Defense programmes. [24]
- The AE 1107F is positioned as part of a mature engine family, with Rolls-Royce citing over 90 million flight hours across 16 platforms and 80% commonality across the AE engine family. [25]
For the stock, defence is attractive for a simple reason: it can diversify away from pure airline-cycle exposure. It’s also politically “sticky” once embedded into a long-duration programme—though investors also know defence procurement is rarely a straight line.
Power Systems and data centres: the “AI electrification” side-quest is getting bigger
One of the more underappreciated components of the Rolls-Royce equity story in 2025 has been the demand tailwind from data centres and critical infrastructure—where backup generation is non-negotiable.
Two December developments stand out:
A five-year capacity agreement with AVK (data-centre backup generation)
On 4 December 2025, Rolls-Royce announced a long-term agreement with AVK to secure production capacity for mtu Series 4000 emergency power generators for five years, explicitly tying the move to the “growing data centre market” and development of HVO‑compatible solutions. [26]
Environmental Product Declarations (EPDs) for mtu emergency power generators
On 11 December 2025, Rolls-Royce said it delivered mtu emergency power generators to a European data centre operator with verified Environmental Product Declarations (EPDs), and described this as a new bar for transparency and sustainability in critical infrastructure energy supply. [27]
The company also said the gensets can operate with sustainable fuels such as HVO, and cited potential CO₂ reductions (under specific conditions) when using such fuels. [28]
This matters for the stock because “data centres” is not a vague buzzword anymore—it’s rapidly becoming an infrastructure asset class with its own procurement standards, disclosure expectations, and grid constraints. Rolls-Royce is trying to meet that market where it’s going, not where it used to be.
Nuclear SMRs: UK momentum is real, but timelines remain long
Rolls-Royce’s SMR business sits at the intersection of engineering ambition, energy policy, and long-lead project finance. Late 2025 brought two major datapoints investors are weighing differently depending on their time horizon.
UK picks Wylfa (Anglesey) for first SMRs
Reuters reported on 13 November 2025 that the UK selected Wylfa in North Wales for its first SMR project, with Rolls-Royce leading the design, aiming to connect to the grid in the 2030s and supporting up to 3,000 jobs during construction. [29]
A Welsh Government written statement the same day added further detail, including:
- The site will host three Rolls‑Royce reactors initially, with scope for five more in future. [30]
- It referenced £2.5bn of initial investment tied to contractual negotiations between Great British Energy – Nuclear and Rolls‑Royce SMR. [31]
- It also stated each Rolls‑Royce reactor is expected to deliver power for the equivalent of around 1,000,000 homes. [32]
Sweden: Vattenfall shortlists Rolls‑Royce SMR and GE Vernova
On 23 December 2025, Reuters reported that Swedish state-owned utility Vattenfall applied for state financing to build new reactors and that it had shortlisted Rolls‑Royce SMR and GE Vernova as potential SMR suppliers, with a decision expected in 2026 but a final investment decision not expected until 2029. [33]
From a stock perspective, these developments reinforce that SMRs are moving from “PowerPoint” toward industrial procurement pathways—but they also confirm the uncomfortable truth: the highest-value revenue is still years away, and dependent on policy stability, regulators, and project finance conditions.
Forecasts: what management guided, and what analysts model beyond 2025
Management guidance for FY2025
As noted, the company reaffirmed in November its FY2025 expectations for:
- Underlying operating profit:£3.1bn–£3.2bn
- Free cash flow:£3.0bn–£3.1bn [34]
The company had also raised free cash flow guidance earlier in the year; in its 31 July 2025 half-year results, Rolls-Royce said full-year 2025 free cash flow guidance stood at £3.0bn–£3.1bn, while cautioning about a heavier second-half maintenance profile (including more Trent 1000 major shop visits). [35]
Rolls‑Royce published analyst consensus (FY2025–FY2028)
One of the most useful “single source of truth” references for forecasts is Rolls‑Royce’s own investor page aggregating analyst submissions (collected in September 2025, based on 13 analyst inputs). It provides a “latest consensus” snapshot across FY2025–FY2028, including revenue, EBIT, free cash flow, EPS and dividends. [36]
The published consensus figures are (in £m unless otherwise stated):
- FY2025: Revenue 19,552, underlying EBIT 3,268, FCF 3,177, EPS 28.7p, DPS 9.3p [37]
- FY2026: Revenue 21,516, underlying EBIT 3,662, FCF 3,572, EPS 32.6p, DPS 11.2p [38]
- FY2027: Revenue 23,378, underlying EBIT 4,079, FCF 4,175, EPS 37.2p, DPS 12.8p [39]
- FY2028: Revenue 25,357, underlying EBIT 4,554, FCF 4,636, EPS 42.6p, DPS 14.7p [40]
Two important caveats for readers (and for Google News standards): Rolls‑Royce itself explicitly notes this consensus is for convenience, does not endorse it, and provides no assurance on accuracy. [41]
Market narrative: big rally, but analysts still flag real-world constraints
Reuters’ November coverage also captured the broader investor framing: the company is confident on targets as airlines lift flying hours and data-centre orders build—yet supply-chain bottlenecks remain a constraint. [42]
What the “bull case” sounds like in late 2025
The optimistic thesis for Rolls‑Royce stock going into 2026 typically boils down to five points:
- Civil aerospace is structurally stronger post-pandemic
Flying hours have recovered beyond 2019 levels in the company’s disclosures (at least through October), supporting services-driven cash flow. [43] - Durability improvements can widen margins and reduce unpleasant surprises
The company has highlighted time-on-wing improvements and a pipeline of upgrades, including near-term certifications for additional durability packages. [44] - Shareholder returns are no longer a future promise—they are happening
A completed £1bn 2025 buyback plus a new £200m interim programme is a concrete signal about cash generation and balance-sheet confidence. [45] - Defence and power systems diversify the story
FLRAA engine testing is a tangible milestone in a major US programme. [46]
Meanwhile, Power Systems is clearly leaning into data-centre demand and the sustainability disclosure requirements those customers increasingly expect. [47] - SMRs provide long-duration optionality
UK site selection plus European interest (Vattenfall shortlist) points to a widening addressable market—albeit with long lead times. [48]
What the “bear case” looks like (the risks that don’t go away)
Even in a strong tape, there are persistent risks that matter for anyone covering Rolls‑Royce as a newsworthy stock rather than a fan club:
- Supply chain friction can cap near-term growth
Rolls‑Royce and Reuters have both pointed to continued aerospace supply-chain challenges. [49] - Maintenance intensity is real, and it affects cash timing
The company previously warned that free cash flow could be lower in the second half of 2025 partly due to major shop visits (including an increase in Trent 1000 visits). [50] - SMRs are politically powerful… and politically fragile
UK and Swedish developments are meaningful, but financing, regulatory approvals, and multi-year election cycles can change the velocity of nuclear programmes. Reuters also notes Vattenfall’s final investment decision isn’t expected until 2029. [51] - Valuation and expectations risk after a huge run
By November, Reuters reported Rolls‑Royce shares had more than doubled since the start of 2025, putting the market capitalisation at around £97bn at that time—meaning the stock price already embeds a lot of “execution continues” assumptions. [52]
Key dates and catalysts investors will watch next
If you only circle a few items on the calendar for Rolls‑Royce stock coverage, these are the ones that matter most heading into 2026:
- 2 January 2026: Expected start of the £200m interim buyback [53]
- 24 February 2026 (no later than): Expected completion of the interim programme [54]
- 26 February 2026: Expected communication of FY2025 results, and likely details on the total 2026 buyback quantum [55]
- Sometime in 2026: Vattenfall expects to pick an SMR supplier (Rolls‑Royce SMR or GE Vernova are shortlisted) [56]
Bottom line for Rolls-Royce (RR.L) stock on 25 December 2025
As of 25 December 2025, the Rolls‑Royce equity story is no longer “will they fix the balance sheet?”—it’s “how far can execution stretch into sustained compounding?”
The late‑2025 newsflow is broadly supportive: buybacks are active, guidance is reaffirmed, civil aerospace recovery metrics are strong, defence programmes are progressing, and SMRs continue to move from ambition to procurement planning. [57]
But the company is also heading into 2026 with high expectations already priced in, and with real operational constraints (supply chain, maintenance cycles) that can still shape quarterly narratives. [58]
References
1. www.londonstockexchange.com, 2. www.rolls-royce.com, 3. www.rolls-royce.com, 4. www.reuters.com, 5. www.rolls-royce.com, 6. www.rolls-royce.com, 7. www.marketwatch.com, 8. www.marketwatch.com, 9. www.rolls-royce.com, 10. www.rolls-royce.com, 11. www.rolls-royce.com, 12. www.rolls-royce.com, 13. www.rolls-royce.com, 14. www.rolls-royce.com, 15. www.rolls-royce.com, 16. www.rolls-royce.com, 17. www.rolls-royce.com, 18. www.rolls-royce.com, 19. www.rolls-royce.com, 20. www.rolls-royce.com, 21. www.reuters.com, 22. www.rolls-royce.com, 23. www.rolls-royce.com, 24. www.rolls-royce.com, 25. www.rolls-royce.com, 26. www.rolls-royce.com, 27. www.rolls-royce.com, 28. www.rolls-royce.com, 29. www.reuters.com, 30. www.gov.wales, 31. www.gov.wales, 32. www.gov.wales, 33. www.reuters.com, 34. www.rolls-royce.com, 35. www.rolls-royce.com, 36. www.rolls-royce.com, 37. www.rolls-royce.com, 38. www.rolls-royce.com, 39. www.rolls-royce.com, 40. www.rolls-royce.com, 41. www.rolls-royce.com, 42. www.reuters.com, 43. www.rolls-royce.com, 44. www.rolls-royce.com, 45. www.rolls-royce.com, 46. www.rolls-royce.com, 47. www.rolls-royce.com, 48. www.reuters.com, 49. www.rolls-royce.com, 50. www.rolls-royce.com, 51. www.reuters.com, 52. www.reuters.com, 53. www.rolls-royce.com, 54. www.rolls-royce.com, 55. www.rolls-royce.com, 56. www.reuters.com, 57. www.rolls-royce.com, 58. www.reuters.com
