Rolls-Royce (LSE:RR) shares absolutely soared between 2023 and 2025. They went from 93p each to almost 1,200p over this time, driven skywards by CEO Tufan Erginbilgic’s comprehensive transformation programme.

This year has been far less spectacular, however, with the FTSE 100 stock gaining ‘just’ 29%. Of course, under normal circumstances, that would be considered solid. But Rolls-Royce isn’t normal, or at least expectations aren’t normal.

So, with this in mind, what might 2027 have in store for shareholders?

Results and guidance

In July, Rolls-Royce delivered another beat-and-raise. First-half underlying operating profit was up by 46% to £2.53bn, beating analyst consensus of £2.37bn. And full-year profit guidance was raised to £4.7bn-£4.9bn, up from £4bn-£4.2bn.

If history is anything to go by, we’ll get a trading update next month. So that will likely dictate where the share price goes heading into Christmas, before the full-year results towards the end of February.

For Rolls-Royce to have any chance of a barnstorming 2027, those 2026 figures will need to impress. And if they do, I would expect mid-term guidance (for £4.9bn-£5.2bn in operating profit, 18%-20% operating margin, and £5.bn-£5.3bn free cash flow) to be formally upgraded.

Remember, operating profit guidance for 2026 is already touching the bottom end of the 2028 target (£4.9bn), two years early.

High expectations

Then again, the market is already well up to date with all this. The current stock price target is 19.8% higher, indicating that most City analysts see further solid gains ahead. But not many are envisioning a monster 2027.

With the stock trading at 30 times forward-looking earnings, the market has high growth expectations baked in. For Rolls-Royce to really shine, a few other catalysts may be needed.

What might they be?

AI capex

AI could be one. The market for power generation equipment is projected to nearly triple between 2025 and 2030, driven mainly by AI-related demand. But while a data centre can be built in as little as 18 months, securing a grid connection can now take three to seven years.

As such, Rolls-Royce’s Power Systems unit has emerged as an unlikely beneficiary of the AI infrastructure buildout. Its mtu gas generators provide continuous power either directly in the data centre or as part of dedicated power plants. Revenue related to this was up more than 50% in the first half.

The company already works with US hyperscalers. Therefore, if these tech giants upgrade their AI capital expenditure forecasts for 2027 and beyond, this would directly benefit Rolls-Royce’s Power Systems division moving forward.

Major developers can’t wait several years for a utility connection, creating new opportunities for modular, scalable technologies such as our mtu gas gensets in the near term and Small Modular Reactors (SMRs) further down the line.

Rolls-Royce

Speaking of SMRs, they could also provide a boost to sentiment (if not the near-term financial outlook), assuming more deals are struck.

Finally, an end to the Middle East conflict would ease concerns over large engine flying hours, inflation and supply chains.

My take

As a shareholder, I’d love to see Rolls-Royce have a monster 2027. However, with the stock trading expensively and market expectations already high, I’m not banking on it.

For long-term investors, I still think the stock is worth considering, especially on dips. But investors expecting fireworks should probably look elsewhere.

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Ben McPoland owns shares in Rolls-Royce.