Shares in Rolls-Royce have staged a remarkable recovery, fully rebounding from the sharp decline triggered by President Donald Trump’s unexpected tariffs announcement in early April. The FTSE 100 engineering powerhouse, headquartered in Derby, saw its share price plummet from 779.4p on April 1 to 635.8p by April 7, erasing more than £10 billion from its market capitalization and sending shockwaves through global markets.
Despite the initial turmoil, Rolls-Royce’s stock has steadily regained ground. As of early May, shares are trading around 783p, surpassing their pre-tariff levels and restoring the group’s market capitalization to approximately £66.4 billion. While still below the all-time high of 812.8p reached in mid-March, this recovery underscores investor confidence in the company’s fundamentals and growth outlook.
The dramatic drop in April followed a period of significant gains for Rolls-Royce, fueled by robust financial results and optimism from a major Ukraine defense summit in late February. That event had propelled the share price from just over 600p to above 800p in a matter of days, as European leaders pledged increased defense spending and support for Ukraine.
Rolls-Royce’s resilience has been underpinned by strong demand in its aerospace and defense segments. The company reported that large engine flying hours in the first quarter nearly doubled compared to pre-pandemic levels, reflecting a global surge in travel demand. Management remains confident, reiterating guidance for 2025 underlying profit in the range of £2.7 billion to £2.9 billion, with free cash flow expected to match that range. The group is targeting nearly £3 billion in underlying profit for the year, despite ongoing uncertainty from global tariff disputes.
Chief Executive Tufan Erginbilgic emphasized the company’s transformation and agility in responding to external shocks. He noted that while tariffs have introduced a degree of uncertainty, Rolls-Royce is implementing mitigating actions and closely monitoring potential indirect impacts on economic growth and inflation.
The recent rebound in Rolls-Royce shares has also helped the company reclaim its position as one of the FTSE 100’s top performers over the past year, with the stock rising more than 90% in that period. The group’s strong operational performance, coupled with a renewed dividend payout, signals a return to stability and growth after years of pandemic-induced volatility.
Looking ahead, investors will be watching the company’s half-year results, set for release on July 31, for further indications of sustained momentum and the effectiveness of its strategies in navigating a complex global trade environment. For now, Rolls-Royce’s swift recovery stands as a testament to its robust business model and the enduring strength of the UK’s engineering sector124.
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