​​​Can the Rolls-Royce share price keep soaring?

​​​Stellar Share Price Performance

​Last year was a phenomenal one for Rolls-Royce shareholders. The company's share price more than tripled, making it the best performer in the entire FTSE 100 index for 2023.

​The momentum has carried over into the new year, with Rolls-Royce shares already up another 43% year-to-date in 2024 so far. This raises the question of whether such a blistering rally can keep going.

​Part of the big share price rise was due to a low base effect after several years of declines. When a stock has fallen significantly, even just a return to prior levels can produce very large percentage gains. Rolls-Royce shares had been depressed by the impacts of the pandemic on the aviation industry it serves.

​Business Turnaround

​In addition to the low base, improving fundamentals at Rolls-Royce underpinned the rebound, as the company returned to profitability in 2023 after pandemic-related losses. A cost-cutting program boosted margins, while a recovery in flight hours increased revenues.

​However, while a positive, the revenue recovery at Rolls-Royce merely returned it to pre-pandemic trendline growth levels. The top-line has not yet shown dramatic outperformance above its historical growth trajectory.

​The key driver of the surge in Rolls-Royce shares seems to be optimistic expectations of much higher profits ahead, rather than what has been achieved so far in its business performance.

​Ambitious 2027 Targets

​Fuelling those rosy expectations are the stretched financial targets set out by the CEO for 2027, including underlying operating profit of £2.5-2.8 billion and free cash flow of £2.8-3.1 billion. That would continue to drive optimism on earnings for the group, though the lofty goals could mean that the journey from here is more volatile.

​Analyst ratings for Rolls Royce

​LSEG data shows a consensus analyst rating of ‘buy’ for Rolls Royce with 4 strong buy, 10 buy, 3 hold and 1 sell – and a mean of estimates suggesting a long-term price target of 443.44 pence for the share, roughly 3% higher than the current price (as of 2 April 2024).

​Technical analysis of the Rolls Royce share price

​Rolls Royce’s share price remains on track for its January 2014 all-time high at 444.10p, judging by the swift near 530% ascent it has seen from its September 2022 low.

​The British multinational aerospace and defence company’s share price is trading within 3% of its record high, above which beckons the 450p mark ahead of the major psychological 500p mark.

​Rolls Royce Monthly Candlestick Chart

​On the daily chart the Rolls Royce share price, which has already risen by close to 45% year-to-date, continues its stellar advance at break neck speed.

​Rolls Royce Daily Candlestick Chart

​Tuesday’s rise above its March high at 429.7p is another stepping stone towards its record high at 444.1p, made in 2014.

​While the October-to-February uptrend line at 415.7p and Thursday’s low at 411.4p underpin, the strong short-term uptrend will remain intact.

​For long-term bullish momentum to be maintained, the Rolls Royce share price should remain above its mid-March low at 378.5p.