Rolls-Royce shares slip as post-update profit-taking offsets strong fundamentals
Rolls-Royce is giving back part of its post-update gains despite strong operating metrics and an accelerated buyback programme. Holding GBX 1,357 could keep the recovery intact, with the 50-day SMA near GBX 1,380 as the next hurdle.
1357.00
1395.20
On 12 November, Rolls-Royce reaffirmed its 2026 guidance, forecasting underlying operating profit of £4.7–4.9 billion and free cash flow of £3.8–4 billion. The company also announced an accelerated £1.5 billion share buyback, which is expected to be completed by 25 February 2027. The repurchases form part of its existing £7–9 billion programme.
Operating performance remains strong. The order book for large aircraft engines has reached roughly 2,500 units. In Power Systems, new orders rose 62% year on year during the first nine months, while the order backlog climbed to a record £8.6 billion.
A break above 50 SMA could accelerate recovery toward GBX 1,400
The scenario outlined previously played out in full. Rolls-Royce shares reached the GBX 1,336 target before the advance began to lose momentum.
Following the trading update, the shares opened with a modest gap of around 2%. Selling pressure emerged soon after the market opened, however, sending the price lower.
The previous session’s opening level at GBX 1,357 now serves as the nearest support. If buyers can defend that area, the chances of a rebound towards the 50-day SMA near GBX 1,380 would improve. A sustained move above the moving average could then extend the recovery towards GBX 1,400.
A move below GBX 1,350 followed by a sustained break lower would invalidate the base case. In that scenario, the risk of another test of the 200-day SMA would increase.
UK GDP growth accelerates but offers limited upside surprise
The ONS reported on 12 November that UK GDP grew 0.7% in the third quarter of 2026, up from 0.5% in the previous quarter. The figure matched analysts’ expectations, limiting its impact as a fresh positive catalyst for the market.
Faster economic growth provides some support for sentiment towards UK equities. For Rolls-Royce, however, stronger macroeconomic data do not guarantee that the rally will continue, particularly while intraday profit-taking persists following the company’s update.
Latest Rolls-Royce News
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