LONDON, July 16, 2026, 10:13 BST.
- Of the £2.3 billion open-market programme, about £1.03 billion, or 45%, has been spent.
- At 1,376.2 pence, the leftover cash is enough to buy back around 92 million shares, or 1.1% of shares outstanding.
- Berenberg left its Buy rating and 1,430p target unchanged after new traffic data put Rolls-Royce ahead of two rival engine makers.
Rolls-Royce Holdings plc LON:RR has now spent about £1.034 billion, or 45%, of its £2.3 billion buyback so far. The firm paid an average price last week that was within 0.3% of Berenberg’s 1,430p target. With the gap closing, the buyback looks less like cheap share retirement and more like a difficult capital-allocation call.
Shares slipped 1.1% to 1,376.2p at 10:05 BST on Thursday, putting Rolls-Royce’s market cap near £115 billion. Half-year numbers land July 30, so the speed and price of the buyback are under closer watch than a usual weekly filing would flag.
At Thursday’s price, the £1.266 billion still in the programme would buy around 92 million shares, or 1.1% of the total. Adding the 83.54 million already bought back, the starting share count would drop by about 2.1%, if the price doesn’t move. Numbers are from the company’s July 15 filing.
| Open-market programme | Completed | Remaining at 1,376.2p |
|---|---|---|
| Cash | £1.034bn | £1.266bn |
| Share of budget | 45.0% | 55.0% |
| Shares retired or purchasable | 83.54m | 91.98m |
| Share of programme-start count | 0.99% | 1.09% |
| Purchase price | 1,237.86p average | 1,376.2p assumed |
The most recent batch totaled 5.34 million shares bought between July 7 and July 13 at a cost of about £76.1 million. The weighted average worked out to roughly 1,426.2p based on daily purchases, which is around 3.6% higher than Thursday’s market price. The running average is still 1,237.86p, or about 10% under the market, but that gap is closing.
Berenberg’s George McWhirter kept a Buy on Rolls-Royce and stuck with the 1,430p target as of Wednesday. The firm’s traffic analysis showed Rolls-Royce staying ahead of Safran SA EPA:SAF and MTU Aero Engines AG (ETR:MTX) for the year so far, and also in the Middle East, even as flight activity dropped more for the rivals.
| Company | Engine hours, year to date | Middle East engine hours | Berenberg view |
|---|---|---|---|
| Rolls-Royce | up 5% | down 4% | Buy, 1,430p |
| Safran | up 2% | down 14% | Buy, €355 |
| MTU Aero Engines | down 1% | down 23% | Hold, €350 |
Relative traffic strength is important since flying hours for large engines drive service revenue. Berenberg pointed to Rolls-Royce’s exposure across civil aerospace, defence, power systems, and nuclear as reasons for a higher valuation. But its price target was just about 4% above where shares closed Thursday.
“We have had a strong start to the year driven by our transformation and self-help,” CEO Tufan Erginbilgic said in April. Rolls-Royce left its 2026 guidance steady, still seeing underlying operating profit in the £4.0 billion to £4.2 billion range and free cash flow between £3.6 billion and £3.8 billion. The £2.5 billion buyback pledge for 2026 amounts to about 66% to 69% of that cash flow forecast. Rolls-Royce
The company’s own analyst consensus from April, based on 12 analysts, guides to 2026 underlying earnings of 37.8p per share and free cash flow of £3.734 billion. The stock’s Thursday close prices that at about 36.4x earnings and a 3.2% yield on cash flow. Using 2028 estimates of 51.8p and £5.15 billion, that improves to 26.6x and 4.5%.
Rolls-Royce pointed to more defence work this week, but analysts say it won’t shift near-term forecasts. The company said it supplied four 1-megawatt mtu generator sets for India’s new INS Mahendragiri. Rolls-Royce didn’t release a contract figure. “The recent ship commissions mark significant milestones in our longstanding partnership with the Navy,” said Sashi Mukundan of Rolls-Royce India. Rolls-Royce
The math can cut both ways. If the stock falls, the company can buy back more shares, but if it climbs, the buyback has less punch. Missing on cash flow would mean the £2.5 billion yearly spend eats up more of what the company brings in. Trouble in the Middle East is another unknown, though management said in April it aims to offset the financial hit for now.
Investors on July 30 aren’t just watching to see if Rolls-Royce reaffirms guidance. Cutting the open-market programme by about 2% helps per-share numbers, but that isn’t enough to offset the 37% earnings growth already baked into consensus for 2026 to 2028. The buyback gives support, but it’s no stand-in for delivering cash.
