Rolls-Royce Holdings plc is entering the new trading year with significant momentum. The confirmation of its creditworthiness by S&P Global Ratings provides a solid foundation for the aircraft engine manufacturer, coinciding with a landmark day for UK markets as the FTSE 100 index surpassed the 10,000-point threshold for the first time.
S&P Global Affirms Investment-Grade Rating
In a move that clarifies the corporate structure, S&P Global Ratings assigned Rolls-Royce Holdings plc a long-term issuer credit rating of ‘BBB+’ with a Stable outlook. This structural rating, effective from January 1, aligns the publicly traded parent company with its operational subsidiary, which received a similar upgrade in August 2025. The Stable outlook reflects the agency’s confidence in management’s discipline throughout the ongoing corporate transformation.
The rating affirmation is supported by robust financial projections for the aerospace giant:
* Cash Flow Forecasts: S&P anticipates the company will generate an approximate free operating cash flow (FOCF) of £3.0 billion for the 2025 fiscal year. This figure is projected to rise to as much as £3.3 billion in 2026.
* Profitability and Leverage: The adjusted EBITDA margin is expected to stabilize between 18% and 19%. The debt-to-EBITDA ratio is forecast to remain comfortably below 1.5x.
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Capital Return Strategy and Market Performance
Concurrent with the rating news, the company continues its current £200 million share buyback program, scheduled to run until February 2026. This initiative is part of a broader capital return strategy, following the completion of a £1 billion program in November. In a regulatory filing published today, Rolls-Royce also updated the total number of voting rights to 8,443,808,552 shares, a direct result of the repurchased stock.
On the London Stock Exchange, Rolls-Royce shares are trading near 1,186 GBp, close to their 52-week high. From a technical analysis perspective, the equity is testing resistance around the 1,200 GBp level. A sustained breakout above this psychological barrier could reinforce the current upward trend, while the area near 1,150 GBp is viewed as a support level should short-term profit-taking occur.
Market attention now turns to late February 2026, when Rolls-Royce is scheduled to release its preliminary results for 2025. A key driver for the share price trajectory will be whether the actual free cash flow delivered meets S&P’s £3.0 billion estimate.
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