London, March 13, 2026, 13:06 GMT
Rolls-Royce (RR.L) shares slipped on Friday even after Moody’s upgraded the British engine maker to A3 from Baa1, a higher credit grade. The stock traded around 1,260 pence by 1303 GMT, down 1.83% on the day. 1
That matters because the rating action lands only two weeks after Rolls-Royce’s annual results sent the shares to a record high. The softer trading suggested investors want another operating trigger, not just another endorsement of the turnaround. 2
On Feb. 26, Rolls-Royce reported 2025 underlying operating profit of £3.5 billion and free cash flow, a measure of cash left after operating and investment spending, of £3.3 billion. It then guided for £4.0 billion-£4.2 billion of operating profit and £3.6 billion-£3.8 billion of free cash flow in 2026, and laid out a £7 billion-£9 billion share buyback — a company purchase of its own stock — for 2026-2028, with £2.5 billion due this year. 3
Chief executive Tufan Erginbilgic said the transformation was continuing “with pace and intensity”. Reuters quoted Interactive Investor analyst Richard Hunter calling the February numbers “sparkling” and saying Rolls-Royce still had “unfulfilled ambitions to maintain the momentum”. 3
Rolls-Royce said its upgraded mid-term margin target would bring it into line with GE Aerospace, its main rival in widebody engines. That puts Friday’s rating move in a competitive context as investors judge whether Rolls can keep closing the gap while still returning large amounts of cash. 2
Moody’s Friday action pushes the group another notch higher after the pandemic-era fall to junk, or below investment grade. For a manufacturer that sells engines expected to stay in service for decades, that is a notable shift in the backdrop even if the equity market barely reacted on the day. 1
The buyback is also no longer just a headline. London Stock Exchange notices show Rolls-Royce filed another transaction in own shares on Friday, part of the capital return programme the company set out with its full-year results. 4
But the case is not risk-free. Rolls-Royce said its 2026 cash-flow guidance includes a £150 million-£200 million hit from supply-chain disruption, and Reuters reported last month that the company was seeking 100 million-200 million pounds in initial UK backing for a demonstrator of the UltraFan 30 engine. If those pressures linger, the stock may need more than rating upgrades and buybacks to move back toward its late-February peak. 3
