Rolls-Royce (LSE:RR) shares have performed spectacularly since CEO Tufan Erginbilgiç took over in January 2023. So far in 2026, though, this astonishing UK stock is basically in line with the wider FTSE 100, rising roughly 5%.
Can Rolls-Royce gets its mojo back by the end of 2027? Let’s take a look at the latest earnings forecasts to try and get a better idea.
The latest figures
In the table below, we can see what City analysts currently reckon the engine maker will generate in revenue and earnings per share (EPS) in 2026 and 2027.
| Revenue | EPS | |
| 2026 | £22.6bn | 37.2p |
| 2027 | £24.9bn | 43.7p |
Applying a simple P/E multiple to the 2027 EPS forecast, we can model three separate cases: conservative, base, and optimistic. Here’s how these scenarios look.
| P/E multiple | Implied share price | |
| Conservative | 25x | 1,093p |
| Base | 30x | 1,311p |
| Optimistic | 35x | 1,530p |
What does this mean?
Now, the first thing to say is that these estimates could prove to be wrong were Rolls-Royce to smash expectations. It has had a nice habit of doing just this since 2023, which explains the stock’s outperformance. But that’s not guranteed to continue.
Due to this uncertainty, we don’t know what historic or forward-looking multiple the stock will attract by the end of 2027. So there’s naturally a lot assumptions being made here.
That said, with the share price currently priced around 1,250p, we can draw a general conclusion. The first is that this is not a cheap stock, and that Rolls-Royce must at least hit its earnings targets to justify the premium valuation.
But with the Middle East conflict heating up again in recent days, there’s every chance that more airlines will cancel flights amid the chaos. And therefore widebody flight hours could fall (less Rolls-Royce engines in the air, basically).
In this scenario, the stock may prove to be overvalued today. The conservative (or bear) case above implies a 13% share price decline by the end of 2027.
On the other hand, the firm recently said it was confident in hitting current market expectations for 2026. It was showing the resilience that management has deliberately built into the business to withstand a more challenging external environment.
We expect to fully mitigate the current financial impact of the disruption to our business…and the actions we are taking, gives us further confidence in our guidance of £4.0bn-£4.2bn of underlying operating profit and £3.6bn-£3.8bn of free cash flow for 2026.
Tufan Erginbilgiç
Therefore, I don’t think the optimistic (bull) case can be entirely ruled out. If that plays out, the share price could rise to an all-time high of 1,530p, good for a gain of about 22% from today’s price.
As a shareholder, I would take that right now.
What are analysts saying?
The current 12-month price target among brokers is 1,492p, implying that they’re leaning more towards the optimistic scenario. BNP Paribas, for example, recently issued a 1,500p target, highlighting continued momentum across all three of Rolls-Royce’s divisions.
Long-term investors who are bullish on the company’s prospects might want to consider the stock while it’s down around 11% from a record intraday high earlier this year. But there are risks to bear in mind due to the valuation and geopolitical backdrop.
For me, I’m going to keep holding my shares while focusing on other FTSE 100 opportunities.
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Ben McPoland owns shares in Rolls-Royce.
