Rolls-Royce Shares Hit New High as 2026 Starts Strong – Bulls Eye Up 2,000p Level

Rolls-Royce share price (LON: RR) has begun 2026 with a new high, extending the gains achieved during a remarkable 2025. The shares reached 1,197.50p, and continue to trade 3.7% higher at 1,192.50p into the close, as bulls look to continue the momentum into this year.

Building On A Strong Year

Today's move builds upon a 2025 performance that saw Rolls-Royce shares nearly double, positioning the company as one of the top performers within the FTSE 100. This upward trajectory reflects a range of factors, including upgraded financial forecasts, positive analyst sentiment, and strategic initiatives aimed at long-term growth.

In early 2025, Rolls-Royce set the trend when reporting a substantial 16% year-on-year increase in revenue, reaching £17.8 billion. Operating profit stood at £2.5 billion, exceeding market expectations and underscoring the effectiveness of the company's turnaround strategy. The Civil Aerospace division played a pivotal role in this success, registering a 23% surge in revenue.

As a result of these robust figures, the company raised its financial targets, projecting free cash flow of £4.3-4.5 billion by 2028, a 20% increase from previous estimates. This optimistic outlook was further reinforced by a £1 billion share buyback program announced for 2025, demonstrating management's confidence in the company's sustained financial health.

Strategic initiatives have also been instrumental in driving Rolls-Royce's share price appreciation. The company's selection as the preferred supplier for small modular reactors (SMRs) by the UK's ČEZ Group marked a significant milestone in its nuclear energy ambitions. SMRs, compact nuclear power stations designed to generate low-carbon energy, position Rolls-Royce favorably in a market projected to reach $295 billion by 2043.

The reinstatement of dividend payments for the first time in five years last year also signalled a return to financial stability.

The turnaround strategy spearheaded by CEO Tufan Erginbilgiç, appointed in 2023, has been widely credited with revitalizing Rolls-Royce. His ‘4 pillar' plan, focused on management restructuring and fostering innovation, has led to a substantial surge in the company's share price, reflecting strong investor confidence in the company’s strategic direction.

Rolls-Royce's strong start to 2026 has the share price 102.67% higher on a rolling 12 month basis, with bulls looking to test, and potentially push beyond that psychological 2,000p barrier in the sessions ahead.