Rolls-Royce raises 2026 targets after profits beat expectations

Rolls-Royce and BAE Systems are expecting higher profits as governments around the world boost their defence spending.

Rolls-Royce is riding two of the biggest investment themes in global markets: the defense boom and the AI buildout.

It now expects to post underlying operating profits of £4.7 billion to £4.9 billion for 2026, up from previous guidance for between £4 billion and £4.2 billion.