Rolls-Royce (LSE RR) shares are renowned for not just beating expectations, but smashing them. They’re up a staggering 1,445% in the last five years but somehow manage to keep rattling along. They’re up 40% in the last year.

Ultimately, where profits lead, share prices follow. Rolls-Royce has consistently upgraded its forecasts mid-year, then gone on to beat both company guidance and analyst expectations.

Why is this FTSE 100 stock flying high?

In 2024, it guided toward underlying operating profits of between £2.1bn and £2.3bn. That marked a big jump on 2023’s total of £1.26bn, but wasn’t a problem for Rolls. Its 2024 profits came in at £2.46bn, driven by cost efficiencies and a strong recovery in aircraft engine servicing revenue.

It was a similar story for 2025. The board guided for profits of between £3.1bn and £3.2bn. They landed at £3.46bn, as booming demand from AI data centres lifted its Power Systems division.

It was the same story with free cash flow. In 2024 it came in £220m ahead of expectations at £2.42bn. And in 2025 it beat expectations by £200m with £3.3bn.

That allowed Rolls to clear its debts and build a £1.9bn cash surplus. As well as upping the dividend, Rolls plans a massive share buyback of between £7bn and £9bn between 2026 and 2028.

Today, the Rolls-Royce share price stands at 1,430p. The shares are expensive with a price-to-earnings (P/E) ratio of 48.6. That’s down from 65 at the start of the year but still pricey. Rolls will have to keep beating forecasts to keep investors happy.

So what do the experts think might happen? Analysts are still keen. In the last six months, 20 brokers have given stock ratings, and 16 name the stock a Strong Buy, with another saying Buy. There are no sellers.

In total, 18 have made one-year share price forecasts. As is typically the case, these range wildly, from a low of 1,199p to a high 1,870p. The most optimistic would see the shares rise more than 30%, as my table shows.

Again, the Rolls-Royce share price will largely be driven by profits. The board forecasts underlying operating profit of between £4bn and £4.2bn for 2026, up between 15.6% and 21.4% from 2025. That’s a pretty tall order but who would bet against this stock?

So what are the risks?

I see three main areas of concern today:

• Stretched valuation. At today’s price, any earnings miss will be heavily punished.
• Supply chain disruptions. Bottlenecks in the aerospace and defence sectors may delay deliveries and drive up costs.
• Geopolitical uncertainty. Middle East escalation would hit engine flying hours and servicing revenue.

The ups and downs of contract wins add another layer of uncertainty, as does the planned rollout of small modular reactors, or mini-nukes. That could be a massive opportunity, if it comes off.

Rolls-Royce won’t maintain recent share price growth but remains a brilliant company that’s still worth considering with a long-term view. But in the short term, as ever, anything could happen.

Should you invest £5,000 in Rolls-Royce Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Rolls-Royce Plc made the list?

Harvey Jones owns shares in Rolls-Royce Holdings.