Rolls-Royce (LSE:RR) shares have gone up exactly 1,000% in five years, according to my data provider. There’s a beautiful symmetry to that return!

However, the FTSE 100 stock has come off the boil recently, falling 18% since early March. This is due to a combination of factors, including rising jet fuel costs, cancelled flight routes, and cautious forward guidance from rival widebody engine maker GE Aerospace.

AGM incoming

Arguably then, what the stock needs is a positive catalyst. Rolls’ annual general meeting (AGM) will be held tomorrow (30 April), so we might get a trading update confirming that full-year guidance is still on track (or not).

After that, the next major catalyst will probably be the firm’s half-year report, which is due late July. The stock tends to see a lot of action one way or the other after the interim results (usually up in recent years).

As a reminder, Rolls has guided for full-year underlying operating profit of £4bn–£4.2bn, and free cash flow of £3.6bn–£3.8bn.

The company has been masterful at setting ambitious targets then demolishing them. But that might be getting harder due to the difficult backdrop of restricted airspace and cancelled flights.

SMRs are huge business

Clearly, the near term is looking tricky and this adds risk. However, as a shareholder who’s more interested in the next decade, I remain very bullish, especially on small modular reactors (SMRs). Or mini nuclear reactors.

If Rolls manages to become a global leader in this space, as it expects to, the opportunity could be enormous. How big? Well, the International Energy Agency (IEA) sees SMR total capacity potentially reaching 120 GW in 2050, with more than 1,000 SMRs deployed.

Cumulative investment could top $670bn by 2050!

Now, this is the IEA’s bullish scenario, but the base case is SMR capacity reaching 40 GW. CEO Tufan Erginbilgic estimates as many as 400 SMRs by 2050.

Whichever way you cut it, this is a high-growth market. Each unit will reportedly cost approximately £2bn–£3bn, assuming the technology is capable of operating at scale (this isn’t proven yet).

Beating the drum

Therefore, it was encouraging to read last week that UK government figures have been in Europe trying to drum up business for Rolls-made SMRs. According to The Telegraph, Business Secretary Peter Kyle has been talking to Sweden and other European allies.

Rolls-Royce SMR has already signed contracts with the UK and Czech Republic to build mini nukes. In doing so, it’s the only company with multiple contractual commitments to deliver SMR units in Europe.

“I’m in advanced talks with Sweden. I’m also beating the drum with other European countries and further afield,” Kyle told The Telegraph.

To be fair, Rolls is already in the final in Sweden along with GE Vernova to supply its SMR tech to state energy giant Vattenfall. But there’s now talk that Germany is considering SMRs to increase its energy independence due to the 2026 disruptions.

If Rolls-Royce SMR can attract orders from other major European countries, especially Germany, the stock should get a decent boost.

Dip-buying opportunity?

Even after falling 18%, the stock isn’t cheap. We’re looking at a forward earnings multiple of 29.

But for investors willing to look beyond the near-term uncertainty, I reckon Rolls is worth a closer look.