Rolls-Royce Earnings: Increasing Fair Value to GBX 960 as the Firm Delivers a Dramatic Turnaround

Under CEO Tufan Erginbilgic’s leadership, Rolls-Royce has repositioned itself as a financially strong, high-margin, and cash-rich aerospace and defense leader. The reinstatement of the dividend, buyback program, and accelerated transformation reinforce its commitment to long-term value creation. The company has executed well on commercial improvements, cost controls, and strengthening its balance-sheet, making it more resilient to industry shocks. As a result, we have revised our model, particularly for large engines with an updated fair value estimate of GBX 960; this is driven primarily by higher aftermarket margins reflecting improved long-term service agreement profitability.