Rolls-Royce accelerates share buyback as 2026 trading stays strong

Traders Union
All News
Business & Wealth
Companies
Rolls-Royce share buyback 2026

Highlights

Rolls-Royce maintains 2026 guidance with underlying operating profit at £4.7 billion–£4.9 billion and free cash flow at £3.8 billion–£4.0 billion, accelerating a £1.5 billion share buyback as part of a £7–£9 billion programme.
Civil Aerospace large engine order backlog grows to about 2,500 engines, with second-half orders including 70 Trent 7000 for Avolon and 22 for Cathay Group, while flying hours rise 4% year-on-year to 114% of 2019 levels.
Power Systems backlog reaches a record £8.6 billion, underpinned by strong governmental and power generation demand, and new Mankato, U.S., operations centre doubles production capacity.

Buyback timing and full-year outlook

As reported by Rolls-Royce in a press release on Thursday, the company maintains guidance for 2026 underlying operating profit of £4.7 billion to £4.9 billion and free cash flow of £3.8 billion to £4.0 billion.

Chief executive Tufan Erginbilgic says the group continues to deliver operational, strategic and financial progress, and that its transformation is building a more diversified portfolio of higher-performing businesses. He says Rolls-Royce will revisit its mid-term targets when it reports full-year results in February, as previously indicated.

The interim £1.5 billion buyback forms part of the existing £7 billion to £9 billion share buyback programme running from 2026 to 2028. Rolls-Royce says the accelerated phasing reflects confidence in sustainable free cash flow growth and longer-term value creation.

Demand trends across core businesses

In Civil Aerospace, demand remains strong in both widebody and business aviation, while the large engine order backlog grows to around 2,500 engines. Orders in the second half include 70 Trent 7000 engines for Avolon and 22 Trent 7000 engines for the Cathay Group, while Air China and Philippine Airlines select 15 Trent XWB-84 and 18 Trent XWB-97 engines respectively.

Large engine flying hours rise 4% year on year in the first 10 months of 2026 to 114% of 2019 levels, compared with 113% in the first half. Rolls-Royce says this supports its expectation that full-year 2026 engine flying hours will be toward the lower end of its 115% to 120% guidance range, while original equipment deliveries stay significantly higher year on year and MRO turnaround times continue to improve.

In Defence, Rolls-Royce says demand stays strong across mature and newer programmes. The MQ-25A Stingray autonomous refueller, powered by AE 3007 engines, completes its second test flight in July, and the company continues autonomous systems development for the U.S., UK and Germany.

In Power Systems, the group reports strong order and revenue growth, led by power generation and governmental demand, with backlog reaching a record £8.6 billion. Rolls-Royce also says its new logistics and operations centre in Mankato, U.S., opened in July and enables it to double production capacity.

We recently wrote about SSS investment strategy as the pension fund defended long-term equity gains despite paper-loss scrutiny.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.