LONDON, June 30, 2026, 10:05 BST
- Rolls-Royce was up 0.95% at 1,428.70p as of 10:02 BST, with trading underway in London.
- J.P. Morgan raised its target for the stock to 1,625p from 1,500p following the Power Systems teach-in.
- Slides from the company suggest data centres make up at least £2.1 billion of Power Systems’ expected 2025 revenue.
- The stock is around 32 times 2026 company-compiled consensus free cash flow, based on Google Finance’s market cap.
Rolls-Royce Holdings plc (LON:RR.) was up 0.95% at 1,428.70p as of 10:02 BST Tuesday. That puts shares about 6.8% off their 52-week high of 1,532.60p. The stock has added 24.05% in 2024 so far, MarketScreener data show, with investors now paying up for growth and wondering when they’ll see another forecast upgrade.
Power Systems took the spotlight this week instead of jet engines. J.P. Morgan NYSE:JPM analyst David H Perry stuck with a Buy and bumped his price target to 1,625p from 1,500p on Monday, according to MarketScreener. Investing.com reported that the bank also raised its 2027-2030 EPS estimates. That came after Rolls-Royce’s June 26 Power Systems teach-in, with the broker noting “potential for RRPS to beat our forecasts.” MarketScreener
The numbers are easy to see. Google Finance lists Rolls-Royce with a £119.17 billion market cap. The company’s April analyst consensus puts 2026 free cash flow at £3.734 billion, rising to £5.150 billion in 2028.
| Measure | Latest figure | Investor read |
|---|---|---|
| Share price | 1,428.70p at 10:02 BST | 6.8% off the 52-week high |
| 52-week high | 1,532.60p | June peak still sets the bar |
| Market value | £119.17 bln | Major UK industrial cap |
| 2026 consensus free cash flow | £3.734 bln | About 32x market cap/free cash |
| 2028 consensus free cash flow | £5.150 bln | Roughly 23x market cap/free cash |
| J.P. Morgan target | 1,625p | Up from 1,500p |
That matters because Power Systems numbers now have a bigger impact. Rolls-Royce put the division’s 2025 revenue at £4.892 billion. Power generation made up 54% of that, with data centres accounting for more than 80% of power generation. The company slides show data centres are at least about £2.1 billion of Power Systems’ 2025 revenue, or over 43% of the division.
| Power Systems item | Company data | Market issue |
|---|---|---|
| 2025 revenue | £4.892 bln | About 25% of 2025 group underlying revenue |
| Power generation share | 54% | This is the top growth driver |
| Data-centre share of power generation | More than 80% | That puts implied revenue at over £2.1 bln |
| Governmental share | 25% | Defence helps support demand |
| Power generation capacity | Up 100%, 2022-2028 | Execution risk now showing up |
| Governmental capacity | Up 150%, 2022-2028 | Capacity has to match orders |
| 2025 margin | 17.4% | Sits close to mid-term target range |
| 2028 margin target | 18%-20% | Little space left for upside margin shock |
Power Systems numbers over the last three years show why this part of the business gets attention. Revenue climbed to £4.9 billion in 2025, up from £3.3 billion in 2022. Operating profit hit £0.9 billion, up from £0.3 billion, while trading cash flow moved to £0.7 billion from £0.2 billion. Operating margin hit 17% in 2025 compared to 8% in 2022, according to the teach-in materials.
Rolls-Royce’s April trading update gave the growth story more backing from orders. The company reported Power Systems order intake in gas and diesel power jumped about 50% from last year, setting a record in March. The backlog stood at £7.3 billion at Q1’s end. CEO Tufan Erginbilgic called it “a strong start to the year.” Rolls-Royce kept its 2026 guidance for £4.0 billion to £4.2 billion underlying operating profit and £3.6 billion to £3.8 billion free cash flow. Rolls-Royce
Civil Aerospace is still the key driver. Rolls-Royce said large engine flying hours climbed 5% in Q1, reaching 115% of 2019, and the group stuck with its 115%-120% target for the year. Berenberg data on Investing.com said engine flying hours grew 5% year-on-year from January to May, outpacing two European competitors. Berenberg raised its 2026 free cash flow forecast to £3.77 billion.
Fresh widebody deals also feed into the installed base story, though the cash won’t hit for years. Reuters said China Eastern Airlines (SHA:600115) is looking to buy 25 Airbus EPA:AIR A330neo jets fitted with Rolls-Royce Trent 7000 engines, with deliveries set between 2029 and 2033.
J.P. Morgan now values Rolls-Royce SMR at £5 billion, up from £3.5 billion before, according to Investing.com. The report said SMR hasn’t made any sales and is still loss-making, so Power Systems is what will drive the nearer-term test for the new target.
Rolls-Royce is up next with its half-year numbers due July 30. Investors will see updates on Power Systems orders, Civil Aerospace flying hours, and the buyback all in the same release.
