LONDON, March 12, 2026, 14:23 GMT
Rolls-Royce was changing hands near 1,280 pence in late Thursday trading in London, off about 1.5% by 13:56 GMT. The stock had hit 1,327 pence earlier, but despite the pullback, it was still trading well above where it stood a year ago, and remained roughly 10% under its 52-week high of 1,420 pence. 1
The main spark came Wednesday, when Rolls-Royce Power Systems and ZF landed a contract from Germany’s defense procurement office to develop the hybrid drive for the MGCS—Main Ground Combat System—the next-gen European tank set to succeed the Leopard 2 and Leclerc models. “Europe needs a strong and reliable defence architecture,” Power Systems CEO Jörg Stratmann said. The company also noted initial prototypes might hit the testing phase before the decade wraps up. 2
That’s significant, with defence now standing out as one of the few strong spots in European equities, just as oil moves closer to $100 a barrel and shakes up the broader market. Shares of Italy’s Leonardo climbed to an all-time high on Thursday, and the European aerospace and defence index tacked on 1.7%. Broader regional stocks, though, slipped lower. 3
Rolls-Royce isn’t strictly a defence stock. Its civil aerospace business still tracks the fortunes of international air travel, while the defence and power systems segments pick up momentum from increased military budgets and rising data-centre demand. Investors are left juggling these contrasting streams of income. “The longer the disruption goes on, the greater the impact on energy prices and in turn global inflation,” said AJ Bell’s Danni Hewson. 4
This week, price moves highlighted the divide: shares surged 5.85% Tuesday, finishing at 1,311 pence and topping the FTSE 100. Still, they remain 7.68% below the 52-week high set on Feb. 26. 5
Feb. 26 remains the key date. Rolls-Royce posted a 40% jump in 2025 operating profit, lifted its 2026 forecast, and announced a buyback program of 7 billion to 9 billion pounds for 2026-2028, with 2.5 billion pounds planned for this year. Analyst Richard Hunter at Interactive Investor called the results “sparkling.” Reuters pointed out that the new mid-term margin target brings Rolls-Royce nearer to GE Aerospace in the widebody engine race. 6
Rolls-Royce’s buyback is underway. According to a March 10 filing, the company picked up 1.98 million shares on March 9 as part of its 2026 programme. That puts the total number repurchased since the start at 9.28 million shares. 7
That defence story alone might not cut it. Oil edged past $100 for a short period on Thursday, global equities slipped once more, and Rolls-Royce continues to lean heavily on civil aerospace—making the shares more sensitive to shifts in airline confidence and interest rate jitters than straight defence peers. 8
