Rolls-Royce hits £100bn market value as turnaround accelerates

Rolls-Royce reached a market value of about £100.3 billion for the first time in its 121-year history after shares rose to as high as 1,190 pence, a milestone that underscores the mammoth rally in the group’s stock this year. The jump lifted year-to-date gains to roughly 110%, and left the company among Britain’s most valuable stocks.

Analysts at Goldman Sachs see further upside, with a price target around 1,290 pence that would value Rolls-Royce at nearly £109 billion. The stock has climbed almost 1,200% on CEO Tufan Erginbilgic’s tenure, whose 2023 reshaping of the group began when shares traded at 93.2 pence and the market valued Rolls-Royce at about £7.9 billion. An investor who put £1,000 into Rolls-Royce when Erginbilgic took over would now have more than £12,700.

Erginbilgic, a former BP executive nicknamed 'Turbo Tufan' for his pace, arrived in early 2023 describing Rolls-Royce as a 'burning platform' and launching a sweeping overhaul that included aggressive cost cutting and zero-based budgeting. The measures, including about 2,500 job cuts in the first year, helped the group pare back losses from the pandemic-driven collapse in civil aviation and set the stage for renewed profitability.

Rolls-Royce makes engines for commercial airliners such as Boeing and Airbus and also supplies propulsion for fighter jets and nuclear reactors for Royal Navy submarines. The post-pandemic rebound in international travel and a surge in defence spending have supported demand for engines and services, while the company has positioned itself at the forefront of Britain’s move into small modular nuclear reactors.

It is now the fifth-largest company by market value on the FTSE 100, behind HSBC, AstraZeneca, Shell and Unilever.

Eighteen analysts cover Rolls-Royce; four rate it a strong buy, nine a buy, four hold and one sell.

Richard Hunter, head of markets at Interactive Investor, called the turnaround 'an extraordinary corporate turnaround' and noted that 'the burning platform has long been extinguished, propelling Rolls-Royce to a group which is now firing on all cylinders.'

Garry White, chief market strategist at Charles Stanley, described the performance as 'one of the most remarkable corporate turnarounds in modern British industrial history.'

Beyond engines, the company is betting on growth in data centre power systems and its nuclear ambitions, including the UK’s first Small Modular Reactor programme, which is expected to be cash-flow positive by 2030. While legacy engine issues and supply-chain pressures remain, investor sentiment has flipped, with Rolls-Royce now widely viewed as a post-crisis success story.