Rolls-Royce Holdings shares closed at 1,454.6p in London on Friday, up 1.72%, leaving investors with a harder question than the daily move suggests: how much flawless execution is already embedded in the price? At a market value of roughly £118.7 billion, the stock is valued at about 30 times management’s 2026 free-cash-flow target. That is a demanding multiple for an industrial company, even one whose turnaround has become unusually cash-generative.

The latest close was 4.9% below the 1,529.8p closing high reached on August 27, according to S&P Global Market Intelligence price data published by StockAnalysis. The pullback has taken some heat out of the chart, but not much out of the valuation.

The cash-flow hurdle

Rolls-Royce raised…