BAE Systems PLC (LSE:BA.) gave investors a tour of its Air division this week but stopped short of offering any new numbers to sharpen its long-term growth pitch.
JP Morgan has raised its price target on BAE Systems PLC (LSE:BA.) to 1,850p, up from 1,800p, citing growing confidence in future drone sales.
BAE Systems PLC (LSE:BA.) has told investors that trading so far in 2025 has been in line with expectations.
The group doesn't expect to be affected by U.S. tariffs on U.K. imports, since the vast majority of the equipment it sells to the U.S. is produced there.
Deutsche Bank has raised its price target for BAE Systems PLC (LSE:BA.) from 1,510p to 1,900p, citing stronger prospects for the defence contractor across key markets.
BAE Systems PLC (LSE:BA.) shares could be in line for a rerating, according to Citi, after reports that the Trump administration is preparing to request a record $1 trillion US defence budget for the 2026 fiscal year, a 12% jump from the current $892 billion.
The UK government's decision to lift defense spending to 2.5% of GDP from 2.3% from 2027 is expected to mean an extra £6.4 billion ($8.4 billion) that year, boosting British military equipment manufacturers and suppliers. Babcock is investing billions in refurbishments and BAE Systems said last month it was ready to step up capital investment beyond the £1 billion it spends annually.
European defense contractors' stock prices have surged due to the renewed European security landscape, increasing defense budgets, and shifting budget allocations towards European defense contractors. BAE Systems plc stands to benefit significantly from increased defense budgets, offering a wide range of advanced military products and services, including hypersonic missile capabilities. BAE Systems' valuation is complex, trading above its median but below the peer group, with a $23.55 price target based on FY26 earnings.
BAE Systems PLC (LSE:BA.) and other UK and European defence shares surged higher again on Monday after the Ukraine defence summit hosted by Kier Starmer over the weekend.
BAE Systems PLC shares surged on Tuesday as prime minister Keir Starmer firmed up plans to ramp UK defence spending. Starmer told Parliament the UK's security budget would climb to 2.5% of gross domestic product by 2027, from the 2.3% level currently.
BAE Systems PLC should largely be shielded from any shifts in US defence spending but is also unlikely to see major benefits initially from higher budgets in Europe, analysts say. Both Shore Cap and Citi analysts pointed to BAE's long-term focus in notes, as looming US efforts toward efficiency prompt speculation of hiked security spending in Europe.
Shares in BAE Systems PLC (LSE:BA.) have been downgraded to a 'hold' rating by Panmure Liberum, as concerns mount over looming cuts to the United States defence budget.