Rolls-Royce Shares Surge 1,119% in 65 Months: Any Room for Growth?
Rolls-Royce shares have surged 1,119% in 65 months, tracking a dramatic post-pandemic rebound. The rally began after a life-saving £2bn rights issue completed at the end of November 2020.
At that time, the stock traded at £1.06. By 16 April, the share price stood at £12.92, ignoring dividends.
Civil aviation delivers
The civil aviation division remains the group’s strongest contributor. In 2025 it delivered 51.8% of revenue and 61.5% of operating profit on an underlying basis.
| Metric | 2025 Figure |
|---|---|
| Revenue share | 51.8% (£10.4bn) |
| Operating profit share | 61.5% (£2.1bn) |
| Operating margin | 20.5% |
Narrowbody opportunity and UltraFan
The group currently focuses on widebody engines. Management has signalled plans to re-enter the narrowbody market.
That move would leverage UltraFan technology. UltraFan promises roughly 25% better fuel efficiency versus the first-generation Trent engine.
Market context
- IATA (June 2025): 30,300 active aircraft worldwide.
- Single-aisle planes: 18,495.
- Larger aircraft: 5,869.
- Order backlog (Dec 2025): about 17,000 aircraft, roughly double recent years.
With only four companies producing airplane engines, competition is limited. Rolls-Royce already powers around one third of the global widebody fleet.
Risks and valuation
Investors have priced in ambitious growth. The shares trade at about 30 times forecast 2028 earnings.
A failure to meet those forecasts could trigger a sharp correction. The business is cyclical and exposed to macro shocks.
Another risk is the small modular reactor programme. Market interest is high, but commercial viability remains unproven.
Outlook
Management does not expect first revenue from a single-aisle UltraFan engine until the early 2030s. That timeline requires patience from investors.
Near term, defence work may sustain earnings amid rising global uncertainty. Demand for new data centres could also support expansion in power systems.
Filmogaz.com assesses Rolls-Royce as well positioned but still a long-term proposition. The company offers upside, but investors should expect volatility and wait for delivery milestones.
