FTSE 100 shares round-up: Rolls-Royce, BAE, Rio Tinto, Rentokil

Rio Tinto’s headquarters in Perth, Western Australia. Photo: ANTONY DICKSON/AFP via Getty Images.

Upgrades by Rolls-Royce Holdings (LSE:RR.) and BAE Systems (LSE:BA.) and a flight to miners including Rio Tinto  Ordinary Shares (LSE:RIO) today further bolstered the standing of the UK stock market at a time of global tech jitters.

The old economy-focused FTSE 100 index moved to within 21 points of breaking 11,000 for the first time, having this week set a series of intraday highs in a strong start to the earnings season.

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The top flight’s latest advance was led by Rolls as the engines giant posted another beat-and-raise set of results and lifted its interim dividend by 33% to 6p a share.

Stand-out metrics included an improvement in operating margin to 22.5% from 19.1% the previous year and 9.7% in the early stages of CEO Tufan Erginbilgic’s turnaround in 2023.

The results further de-risked medium-term targets as Erginbilgic upgraded operating profit guidance for 2026 to between £4.7 billion and £4.9 billion and free cash flow to near £4 billion.

He said: “Our transformation continues to deliver, and we are demonstrating that Rolls-Royce is now a very different company to that of the past.”

The CEO hailed Rolls’ resilient and diversified portfolio, with three strong businesses spanning civil aerospace, defence and power systems that can respond to changes in the external environment with agility and pace.

The shares rose 70.6p to 1,450.6p as Morgan Stanley said all the headline metrics in today’s results were materially ahead of consensus, with all divisions contributing. The bank has a price target of 1,500p, which is where Rolls shares peaked at the start of this month.

The half-year figures of BAE Systems further demonstrated the defensive appeal of the FTSE 100 after underlying earnings rose 11% to £1.7 billion alongside a £3.2 billion improvement in order intake to £16.4 billion.

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The defence group now sees 10-12% growth in 2026 underlying earnings, compared with the 9-11% forecast previously, and has lifted its cumulative free cash flow target for 2024 to 2026 to more than £6.7 billion from £6 billion.

BAE upped its interim dividend by 11% to 15p a share as chief executive Charles Woodburn said the group remained well placed for long-term growth.

He added: “The global threat picture remains highly volatile and governments are responding with sustained increases in their defence budgets.”

The shares rose 35p to 2,055p, which compares with a record 2,330p in the early days of the Middle East war and June’s low point for the year at 1,792p.

Rio Tinto shares extended their positive run since yesterday’s interim results, lifting by another 186p to 7,163p after City firm Berenberg upped its price target to 8,600p.

The bank believes that investors who have enjoyed the outperformance of BHP Group Ltd (LSE:BHP) versus Rio Tinto so far this year - BHP is up by 39% versus Rio’s 16% year-to-date - have an opportunity to switch their allegiance from one major iron ore producer to another.

Its view is supported by Rio management’s focus on productivity and value creation from the portfolio, including plans to unlock $5-10 billion from disposal of non-core assets.

Berenberg added: “After a broad sectoral pullback, we like Rio’s valuation, cash flow generation and set-up versus direct peer BHP, and move to Buy with a 8,600p price target.”

Other miners also fared well, including Endeavour Mining (LSE:EDV) and Anglo American (LSE:AAL) after posting results today.

On the fallers board, another reminder of the difficulties still facing Rentokil Initial (LSE:RTO) in the wake of 2022’s acquisition of US pest control business Terminix today left shares 73.4p lower at 369.9p and some 25% below their level in early May.

New boss Mike Duffy said in today’s interim results: “We are not delivering on our growth potential in many of the markets we operate in, nor adequately benefiting from our scale.”

He vowed to simplify the group after noting that Rentokil was “overly complex” with operations in 90 countries but 93% of operating profit coming from its leading 20 countries.

Duffy reiterated full-year guidance but retired a North America margin target of 20% in order to prioritise volume growth and investment over short-term margin expansion.

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The need to focus on the top line was highlighted by second-quarter revenues growth in North America pest control of 2.4%, a slowdown from 2.8% in the first quarter amid some weakness in residential lead flow towards the end of the period and into July.

This was not entirely unexpected after US-listed peer Rollins Inc (NYSE:ROL) missed earnings expectations in its quarterly results last week.

Rentokil shares are back where they were in September, having recovered from a post-tariffs low of 334p in April 2025 to 500p this April. The dividend is 8% higher at 4.48 US cents.

Other fallers included the shares of London Stock Exchange Group (LSE:LSEG), having posted an 11% advance in the five weeks leading up to today’s interim results.

The reverse of 270p to 8,928p came despite a record half year for the financial data and analytics business as pre-tax profits rose by 29% to £1.3 billion.

The dividend for payment on 16 September rose 17% to 55p a share and was accompanied by plans for a further £1.4 billion of buybacks.

Highlights in today’s results included strong levels of trading activity in equities, alongside acceleration in growth from subscription-based businesses.

Chief executive David Schwimmer also set out more details of the company’s AI monetisation strategy, including the use of recurring subscriptions for use of LSEG data sets with AI models.

He said: “AI in financial services will drive enormous value, but comes with significant challenges for customers.

“We are the partner to help them address those challenges: we have the infrastructure, the proprietary data, the trust, the regulatory expertise and the institutional history.”

He tightened revenues growth guidance for this year to 7-7.5% from 6.5-7.5% previously, although Morgan Stanley pointed out that the City consensus was already above this level at 7.8%. The bank has a price target of 12,100p.