It’s been a phenomenal few years to be an aeronautical engineer Rolls-Royce (LSE:RR). The company’s shares were among the best performers on the stock exchange FSTE 100 over the last few years. However, even entering 2025 with such achievements, they once again performed exceptionally well. Since the turn of the year, the Rolls-Royce share price has increased by 86%.

Not only has the company’s stock risen dizzyingly in recent years, but its business performance has also been impressive.

Lost opportunities

As 2024 approached, I thought, “Should I buy Rolls-Royce shares? and chose not to do so, missing out on a year of massive growth.

As 2025 approached, I thought the same thing, I did nothing again – and Again missed a tumultuous performance.

Now, with 2026 on the horizon and with Rolls-Royce’s share price rising by five years 741%, I (surprise, surprise) ask myself the same question.

Could it be time for me to add some Rolls-Royce shares to my portfolio?

The price doesn’t seem unreasonable

Looking at an airplane’s vapor trail doesn’t necessarily indicate where it will go next. It may change course.

It’s similar with share prices. Rolls-Royce’s excellent performance in recent years gives no confidence about the future.

What’s compelling, however, is that despite growing 741% in five years, Rolls-Royce’s share price to earnings ratio today is 16.

This isn’t a screaming deal. But I also don’t think it’s necessarily high-priced for a proven blue-chip company with solid growth prospects.

There is something to look forward to

In recent years (and again this year), Rolls-Royce has raised its medium-term prospects. It also consistently achieved its financial goals, increasing the city’s trust in the company’s management.

Just a few weeks ago, it confirmed its full-year 2025 forecast of £3.1-3.2 billion in operating profit and £3.0-3.1 billion in free cash flow.

With growing demand in civil aviation and defense, as well as stable long-term demand for power systems, all three Rolls-Royce business divisions have the wind at their backs.

Add to this the company’s tightened financial discipline in recent years and focus on financial results, and I consider the investment case to be forceful.

Staying on the sidelines

Based on this, I think the Rolls-Royce share price could continue to rise in 2026.

However, there are a few things that put me off investing, which means I’ll stay on the sidelines for now.

One of them is, ironically, how well the stock is doing.

Part of it is undoubtedly business results, but part of it is also dynamics. The dynamics can change suddenly, even if the company is doing well.

As such, I see a risk that Rolls-Royce’s share price could decline even if the company disappoints the market somewhat in any way.

Another risk that worries me is the prospect of slowing demand for civil aviation. This percentage has been high in recent years, but geopolitical disputes and tightening consumer budgets could potentially lead to a slowdown.

Sometimes the industry is also blindsided by dramatic overnight drops in demand that cannot be predicted, such as during a pandemic or after terrorist attacks.

With this risk in mind, I do not intend to buy Rolls-Royce shares as we approach 2026.