In the last year, the Rolls-Royce (LSE:RR.) share price has zoomed up from £8.69 to £12.67 at the time of writing. This marks an incredible 45.8% rise in the period.
However, can its shares still rise by a further 26% to £15.97 by the end of August?
This is exactly three months from now. And, I don’t think it’s out of the question that the firm’s shares can reach this figure over that period.
The bull case
There are many catalysts that could propel Rolls-Royce shares further. Across all the aircraft engine manufacturers’ divisions, there are plenty of reasons for optimism.
Firstly, its largest and most profitable division continues to excel, as large engine flying hours have now reached 115% of 2019 levels. They’re expected to remain around 115%-120% for the rest of the year.
As a result, in the first quarter of 2026, the company’s large engine original equipment (OE) deliveries grew by 18% year on year.
Secondly, and I’d say rather unfortunately, global conflicts look to be on the rise. The company’s defence division should therefore benefit. We’re already seeing evidence of this in the first quarter, as defence OE deliveries increased by 20%.
Thirdly, the firm’s power systems segment saw a record number of orders in March. The company’s order backlog here now stands at £7.3bn.
I only see this accelerating, as trillions of dollars are expected to be spent on AI data centres over the next few years, and Rolls-Royce can help to power this.
Now, it’s important to note that the company is releasing its half-year results at the end of July. For its share price to reach close to £15.97, I think it would need to see a continuation of its strong growth or even better, in its interim report.
The bear case
While there are many positive aspects to the company’s operations, there are also a few obstacles for its shares to reach the target mentioned above.
Most notable is that its shares are already pretty expensive. Right now, they’re trading at a forward price-to-earnings ratio of 35.2. If they went up a further 26%, they would become even more expensive.
Also, investors should keep in mind that the next three months represent the summer holidays. And, currently, there are concerns about jet fuel supply, with many flights already being cancelled.
This could hurt demand for the company’s aircraft engines over the period. If there is evidence of this in the interim results and outlook, I think it will be very challenging for the Rolls-Royce share price to continue appreciating over the summer.
All hinges on the interim report
Ultimately, I believe whether the aircraft engine manufacturers’ shares reach £15.97 or not depends on how its interim results at the end of July go.
But even then, I don’t think it should matter too much for long-term focused investors, as long as they have strong conviction in the fundamentals of the company.
I think the firm has a very bright future, and the conditions are in place for all of its divisions to grow well over the long run.
Overall, that’s why I believe investors should consider buying its shares.
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Muhammad Cheema does not hold any positions in the companies mentioned.
