The average analyst 12-month price target for Rolls-Royce (LSE:RR.) shares is 1,489p at present. That’s only about 1% above the current share price meaning that it was to be hit, a £10,000 investment today would grow to just £10,100 (ignoring dividends).

I reckon we’ll see the average price target rise in the weeks ahead, however. Because Rolls-Royce just posted another brilliant set of results.

Superb H1 results

On Thursday (30 July), the aerospace and defence company posted its half-year results for 2026. And the numbers were very strong.

For the period:

• Revenue was up 25% year on year to £11.3bn.
• Underlying operating profit was up 46% to £2.5bn.
• Free cash flow was £2bn versus £1.6bn a year earlier.
• Return on capital was 22% versus 16.9% a year earlier.

Notably, the company raised its guidance for 2026. It now expects £4.7bn to £4.9bn in underlying operating profit and £3.8bn to £4bn free cash flow versus previous guidance of £4bn to £4.2bn and £3.6bn to £3.8bn.

The company also said that it has further confidence in its mid-term guidance. So overall there was a lot to like.

Unlocking new growth opportunities

Commenting on the results, CEO Tufan Erginbilgic said that the company made significant operational and strategic progress in the first half of the year. In the company’s Power Systems division, it has been generating profitable growth from data centres while also having success on the Small Modular Reactor (nuclear energy) front.

“Our transformation continues to deliver, and we are demonstrating that Rolls-Royce is now a very different company to that of the past. We have unlocked new growth opportunities across the Group and created a resilient and diversified portfolio, with three strong businesses that can respond to changes in the external environment with agility and pace.“
Rolls-Royce CEO Tufan Erginbilgic

Can the share price keep flying?

As for what this means for the share price, I think it’s going to keep climbing in the near term. While the valuation is high, the trend is up, and if analysts raise their price targets as I expect them to do, the shares should get a boost.

I wouldn’t be surprised to see the share price hit £16 or £17 over the next year. Add in dividends and investors could be looking at solid returns.

Taking a longer-term view, the outlook appears to be bright too. Here, growth could come from the defence, data centre, and the nuclear industries.

Note that its current mid-term guidance is underlying operating profit of between £4.9bn and £5.2bn and free cash flow of £5bn to £5.3bn. This guidance could be upgraded soon, however, if the company continues to perform well.

Will I buy?

Having said all that, I’m not in a rush to buy the shares. Because I think we could see some market volatility between now and the end of 2026, creating better entry points.

Also, the valuation is lofty at present. So, there’s minimal room for a setback such as an unexpected increase in costs.

So right now, I’m focusing on other opportunities in the market.

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

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Edward Sheldon does not hold any positions in the companies mentioned