Rolls-Royce’s FTSE 100 shares pass £10 for the first time
Shares in FTSE 100 giant Rolls-Royce have reached the £10 for the first time in its history.
The Derby-headquartered behemoth started the day with its shares priced at 988p – giving it a valuation of £83.5bn.
But after a 1.3 per cent rise so far today, Rolls-Royce’s shares are now changing hands for 1,001p.
The latest milestone means that Rolls-Royce’s share price has doubled from where it was in September 2024.
Rolls-Royce has enjoyed an almost unprecedented run of success on the London Stock Exchange since the low of the Covid-19 pandemic.
Even a sharp fall in the aftermath of US President Donald Trump’s tariffs announcements in April failed to stop the company’s share price resuming its consistent rise.
Speaking earlier this month when it became clear that Rolls-Royce’s share price would hit the £10 mark within the coming weeks, AJ Bell investment analyst Dan Coatsworth said the milestone would be “quite an achievement considering it was trading below £1 only three years ago”.
Rolls-Royce’s earnings estimates ‘keep going up’
He added: “Investors have made a mint and they’re still holding out for more, given how the shares keep rising.
“Rolls-Royce is a rare good news story in a market clouded by uncertainty. Its business turnaround efforts have been a great success, it is winning more contracts and has a tailwind from many governments committing to greater defence spending.
“Upgrades to earnings forecasts can help to drive up a company’s share price and Rolls-Royce is flying high.
“Whereas a lot of companies are suffering from earnings downgrades amid uncertainty around the global economy and tariffs, Rolls-Royce’s earnings estimates keep going up.”
However Coatsworth did issue a warning over what might happen to Rolls-Royce’s share price if its financial performance does not continue to meet expectations.
He said: “A year ago, the consensus earnings forecast for Rolls-Royce’s 2026 earnings per share was 22.32p; now it is 28.93p.
“Another key driver for the shares is that investors have been prepared to pay a higher multiple of earnings to own the stock.
“That’s the definition of a re-rating and Rolls is now trading on 36.3 times next 12 months’ earnings versus 24.3-times last October.
“This re-rating can’t go on indefinitely and it puts pressure on Rolls-Royce to keep delivering good news.
“The danger with highly rated stocks is that their shares can fall back quickly if earnings are simply in line with expectations.
“They have to keep beating expectations to warrant trading on a premium rating such as 36 times forward earnings.”