London, February 18, 2026, 08:56 GMT — Regular session
- Rolls-Royce shares picked up around 2% in early London trading, following a surge across defence names.
- BAE Systems delivered stronger-than-expected profits and struck an optimistic tone, turning the spotlight back onto UK defence stocks.
- Rolls-Royce full-year results land Feb. 26; investors are watching closely for guidance and cash signals.
Shares of Rolls-Royce climbed Wednesday, picking up momentum as European defence stocks rallied. The move followed BAE Systems’ stronger-than-expected profit and its outlook for increased sales and operating profit.
Rolls-Royce is set to report full-year results next week, and traders are watching closely with the shares hovering near their recent peaks. That high bar doesn’t leave much space for any disappointment on cash generation, margins, or the outlook, they said.
Rolls-Royce gained roughly 2.1% to hit 1,324 pence, up from its previous finish at 1,297 pence, Investing.com data showed. The stock reached 1,330.5 pence during the session, just shy of its 52-week high.
BAE, the UK’s largest defence contractor, posted a 12% jump in operating profit for the year, reaching 3.32 billion pounds. The company also reported a record order backlog of 83.6 billion pounds.
BAE’s Chief Executive Charles Woodburn said, “In a new era of defence spending, driven by escalating security challenges, we’re well positioned to provide both the advanced conventional systems and disruptive technologies needed to protect the nations we serve now and into the future.” Reuters
Defence stocks in Europe climbed, with the sector up 2.2%. BAE surged almost 6%, giving the STOXX 600 an extra lift, Reuters said.
Defence isn’t the whole picture for Rolls-Royce. Investors are keeping a close eye on engine servicing demand in civil aerospace, where more flying hours usually translate into increased “aftermarket” revenue—fees tied to maintenance, repairs, and spare parts.
According to its investor calendar, the company plans to release its 2025 full-year results on Feb. 26. Investor roadshows are lined up for early March, right after the report drops.
Rolls-Royce’s 200 million pound share buyback, unveiled in December, has been propping up the stock—but investors are laser-focused on next week’s cash delivery numbers.
This trade can reverse in a hurry. Should costs climb more than anticipated, or if demand slips in crucial end-markets, a stock that’s been priced for reliable performance through 2026 could take a hit.
Rolls-Royce will report results on Feb. 26. Investors are zeroing in on guidance and cash flow, eager for updates on shareholder returns as well.
