Rolls-Royce Holdings PLC (LSE:RR.) reports full-year 2025 results on Thursday, and the numbers will almost certainly be good. The more interesting question is what the company does about targets that the market has already left behind.
According to RBC Capital Markets, which carries an 'outperform' rating and a 1,450 pence price target on the stock, sell-side consensus already expects Rolls to hit its 2028 EBITA guidance of £3.6 billion to £3.9 billion as early as this year, with the free cash flow target of £4.2 billion to £4.5 billion expected to follow in 2027.
Consensus sits around 20% above the 2028 EBITA target and roughly 10% above on free cash flow. The targets, only set in February 2025, are effectively redundant before Rolls has had a chance to celebrate them.
RBC's own forecasts are more conservative than consensus on margins, particularly in Civil Aerospace, where the bank sits 9% below consensus on 2026 EBITA. The analysts expect a larger uplift on earnings than cash flow at the results, partly because of provisions releases in the civil aero division.
The beat and raise track record is well established. After the first half of 2025, Rolls lifted its full-year EBITA guide by 10% and its free cash flow guide by 8%, according to RBC. There was no change at the November trading update, which historically has tended to precede a final beat.
On shareholder returns, RBC calculates that Rolls has completed £1.2 billion of buybacks over the past 12 months, and expects a similar programme of around £1.3 billion over the next year. The cash pile, the bank notes, is growing faster than buybacks are consuming it.