FTSE 100 shares round-up: Rolls-Royce, Hikma, Howden Joinery
Analysts have been quick to comment on Rolls, but despite another fantastic session, it isn’t the best-performing FTSE 100 stock today. City writer Graeme Evans reveals what is.
26th February 2026 13:46
by Graeme Evans from interactive investor
The Rolls-Royce Trent 1000 engine powers a Boeing 787 Dreamliner. Picture credit: Rolls-Royce via Flickr.
Rolls-Royce Holdings (LSE:RR.) was today described as the “gift that keeps on giving” after forecast-beating results helped the engines giant close in on Unilever (LSE:ULVR) as the fourth-largest company in the FTSE 100.
The stock opened above 1,400p for the first time as chief executive Tufan Erginbilgic signalled his confidence with the launch of a three-year plan to buy back shares worth up to £9 billion.
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His pledge alongside the release of upgraded medium-term targets meant Rolls played a part in another record session for the FTSE 100 index, which consolidated all of yesterday’s 1.2% advance to set an intraday record of 10,831.89.
Other heavyweight stocks on the front foot included Aviva (LSE:AV.) ahead of its results next week, while RELX (LSE:REL) recovered ground in a further sign that recent artificial intelligence (AI) disruption fears are easing.
However, Hikma Pharmaceuticals (LSE:HIK) is in danger of dropping out of the FTSE 100 index in next week’s reshuffle after it disappointed the market with its 2026 guidance.
The slide of 258p to 1,394p came as the accessible medicines business forecast revenues growth of between 2% and 4% in 2026, which compares with the 7% seen in 2025 results.
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Today’s rise of 66p to 1,376p means Rolls-Royce is now worth £116 billion and within £1 billion of overtaking Unilever in fifth place and £3 billion shy of Rio Tinto Ordinary Shares (LSE:RIO) in fourth behind the big three of HSBC Holdings (LSE:HSBA), AstraZeneca (LSE:AZN) and Shell (LSE:SHEL).
UBS had a price target of 1,625p and Morgan Stanley 1,500p prior to this morning’s results.
The latter said the key standout in today’s presentation was the large multi-year buyback, reflecting the group’s “extraordinary progress and management’s confidence in the outlook”.
It said the plan implied total shareholder returns equivalent to 70-90% of free cash flow over the coming three years, including the payment of £3.3 billion of dividends up to 2028.
Rolls only returned to the dividend ranks last year with its first payment in more than five years, while a £1 billion share buyback was its first for 10 years.
A final dividend of 5p a share is due to be paid on 3 June, taking the total for 2025 to 9.5p and a 32% payout ratio of underlying profit after tax.
In today’s note headed the “gift that keeps on gifting”, Morgan Stanley said a cash flow target for 2028 of between £5 billion and £5.3 billion was about 8% higher than City forecasts.
It added that management’s record of under-promising and over delivering meant it would not be surprised to see the consensus moving to more than £5.5 billion. Rolls generated £3.3 billion of free cash flow in 2025, up from £2.4 billion the year before.
Today’s results for 2025 showed an operating profit of £3.5 billion, with the 16% beat against expectations led by the Power Systems division as Rolls continues to capture profitable growth in the data centre market. Civil aerospace was about 7% ahead, according to UBS forecasts.
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A strong end to 2025 meant Howden Joinery Group (LSE:HWDN) outpaced Rolls at the top of the FTSE 100 index.
Profits came in about 5% higher than Berenberg forecasts, up 5.1% on a year earlier to £344.9 million as the kitchen supplier continued to grow share in a subdued UK market.
The shares rallied 84p to an 18-month high of 940p as management said its planning assumptions for 2026 suggest that the UK kitchen market will be level year-on-year, following several years of decline.
Berenberg, which had a price target of 1,000p prior to the results, said: “The balance sheet remains central to the Howden investment proposition and also supports its ability to build and invest when others cannot.”
A dividend of 16.9p has lifted the total for the year by 3.3% to 21.9p.
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