Rolls-Royce Shares Surge 3% as Analyst Upgrades Target £12.50 on SMR Deal Hype

LONDON, October 30, 2025- Rolls-Royce Holdings plc (RR.), the engineering icon of the FTSE 100, sparked a new buying spree today as the stock was upgraded to a hold rating with a PS12.50 target by Berenberg, highlighting a historic landmark small modular reactor (SMR) venture with nuclear ambitions in Sweden. The stock soared during early trade and capped a year-long surge of extraordinary rebound and speculation in the green propulsion shift at the company.

Berenberg Upgrades Fuel 3% Rally to PS11.55

The bombshell call made by Berenberg to push the price target up by 240p to a bullish 1,250p confirms the turnaround story of Rolls-Royce, with reference to the strong civil aerospace demand and commercial inflexion of SMR. The upgrade is coming with government promises of nuclear developers to receive compensation in Sweden, and the PS500 million SMR bid by Rolls-Royce has been approved, along with the competitors.

This boosted the RR. shares (LSE: RR.) by 3.1 per cent to 1,155p, and it broke PS1,1, resisting the 2025 doubling. The volume shot up 150 per cent over the norm, and the cash flowed into the Invesco to Legal and General funds racing after the 1,500 per cent five-year miracle of the stock since the pandemic deathbed.

The engines of Rolls-Royce are on liftoff, strategists announced, as the PS90 billion FTSE heavyweight shares are trading at an alluring 25 x forward earnings, a price cut to industry rivals in the boom of aviation post-Covid.

FTSE 100 Rises to 9,820 on the Engineering Edge

consolidating the closing of 9,780 in the prior day, FTSE 100 in early trading was headed toward 9,820, as Rolls-Royce jetstream propelled BAE Systems and Smiths Group by 1.5. The industrials contingent of the benchmark, which makes 18% of the weighting, neutralises commodity cools with Glencore drifting 0.8 on metal malaise.

Euro envy: Frankfurt DAX slips flat on auto tariffs, Milan FTSE MIB falls 0.4% on debt wobbles. London’s allure? By industry data, aerospace had a 20% swell in its order backlog, which was augmented by the BoE reduction of probabilities to 90% in December. The push by Sterling to 1.30 is helpful to the exporters.

The story of Rolls-Royce fits the synchrony with the weekly pharma and energy turnover of AstraZeneca and BP, writing in the FTSE sector symphony.

SMR Pact and Aerospace Rebound Power Horizon

The revival of Rolls-Royce will depend on two things: civil aerospace, the aftermarket revenues of widebody engines, were 25% booming with long-haul revival, and SMR thrust by New Markets. The Swedish alliance, which could open PS2 billion in exports, would make Rolls-Royce the nuclear leader in Europe, with the UK’s Great British Nuclear considering such deals.

CEO Tufan Erginbilgic: PS1 billion in cost cuts that started in 2023 have boosted margins up to 12, with defence contracts intact at PS7 billion/year. Small modular reactors are promising PS52 billion in sales worldwide in 2050; a decarbonization and a profit maker.

The stock yields 0.5%, and it attracts growth hounds and free cash flow is estimated to reach PS2.5 billion in 2026 to fund buybacks. Frogger-EV/sales-multiples-at-3x-lure-technology-crossover-plays EV/sales multiplies are singing through to triumph as bulls chant.

Investor Radar: Upskies and Turbulence

Looking at 2027, analysts expect growth of 15% in earnings, and this is supported by 500 new jet orders and SMR prototypes by 2029. Innovations: Hydrogen propulsion and recovery trials at Boeing. Clouds? Any 5% of revenues would be dented by supply chain snarls and the US election trade shocks.

The targets are in the 1,200-1,300 range, which suggests an increase of 10%, a consensus buy rating of 18 brokers. Strap in, go up, you fool, says one of the veterans.

BAE Systems Echoes in Defence Glow

Peer BAE Systems (LSE: BA.) rose 2% on F-35 engine synergies with Rolls-Royce, but RR.’s SMR spotlight beats its PS90 billion cap compared to BAE’s PS40 billion. The two of them weaponise the defence-industrial base of FTSE.

Markets Scan Fed Finale, Reeves Reckoning

As the day of October 30 comes, FTSE futures probe at 9,850, but the Fed’s last hurrah and fiscal fireworks on the budget are on the horizon. Innovation is the fuel behind portfolios, with Rolls-Royce flying, UK engineering is driving innovation.