economy

January 9, 2026

Rolls-Royce has hit a record high every trading day of 2026. Here's why

While Rolls-Royce stock has been swept up in the defense rally, the London-listed company has much more going for it.

Rolls-Royce has hit a record high every trading day of 2026. Here's why

TL;DR

  • Rolls-Royce shares have achieved record highs consistently this year.
  • The company benefits from exposure to the defense sector, a strong power systems business, and a broader FTSE 100 rally.
  • Geopolitical tensions have boosted defense stocks, though Rolls-Royce trails some European competitors.
  • Rolls-Royce's defense business is about 25% of revenue and saw minimal growth year-on-year.
  • The power systems segment, including engines for ships/submarines and data centers, is experiencing significant order intake growth.
  • UBS analyst Ian Douglas-Pennant raised the price target for Rolls-Royce, citing upgraded expectations for power generation sales and accretive data center sales.
  • Profitability in the power business could increase significantly by 2028.
  • Rolls-Royce is developing an energy generation business and received government backing for the UK's first small modular nuclear reactor.
  • The stock's price-to-earnings ratio is a potential concern for investors.
  • Investors are anticipating full-year results and monitoring news on an upcoming share buyback program.

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