Who expected Rolls-Royce (LSE: RR.) shares to crash in 2026? Not me, I must say. And while a crash has not happened yet (the term typically refers to a drop of 20% at a minimum), the FTSE 100‘s largest manufacturer did come pretty close. From a high in March, the share price dropped 19.4%. A pretty big drop for what has fast become a UK stock darling.

The share price still being some distance from its previous highs has put it in the crosshairs of bargain hunters. Is this a golden chance to buy into one of Britain’s hottest companies? Or is the drop an early warning of bad things to come?

What’s going on?

To start with, what’s the crash all about? In a nutshell, it’s the consequences of the conflict in the Middle East. The biggest factors are the twin issues of rising jet fuel and closed off airpaces. Fewer flying hours is a big problem for Rolls-Royce which draws much of its revenue from maintenance of its engines.

A secondary issue worth mentioning is the inflation that looks like it’s coming our way. Another cost-of-living crisis could dampen demand for airline tickets too. Of course, the worst consequences of this whole episode is the fact that there is another terrible war taking place. But it’s worth being aware of the very real impact that it is having on businesses too.

Hold on a minute. Don’t defence stocks tend to perform well with rising conflict? It’s true that other FTSE 100 defence firm BAE Systems has been rising this year. It’s likely to have had some uplift on the Rolls-Royce share price too, but it’s still a small part of a large company.

Is it a buy?

Putting it all together like that sounds pretty bad, doesn’t it? Perhaps not. While the share price has taken a tumble in recent months, I still could have bought in cheaper at any point in 2025. The latest results showed a 40% increase in underlying operating profits. We might have been looking at another monster year were it not for the geopolitics.

The long term looks bright, too. Recent months have seen more positive developments in the push to build out SMRs – the mini nuclear power stations that Rolls-Royce is hoping will be the energy of the future. And the company’s role in backup power generation for AI data centres is worth a mention too.

On the whole? It remains to be seen whether recent events will turn into a full-blown crash for Rolls-Royce or just be white noise in the grand scheme of things. I suspect that this may be seen as a buying opportunity further down the line, though. I think it’s worth considering.

John Fieldsend has positions in Rolls-Royce and BAE Systems.