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BAE Systems PLC BA.

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Stock XLON Rating as of
GBX 1,394.00 +2.00 (0.14%)
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Company Report

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BAE: We Increase Fair Value Estimate From GBX 1,330 to GBX 1,490 on Higher Defense Spending

Loredana Muharremi

We are increasing our fair value estimate for wide-moat BAE from GBX 1,330 to GBX 1,490 on the back of higher budgeted defense spending for Europe. Overall, the latest industry estimates show a cumulative increase of over USD 500 billion in European defense for the next decade compared with last year's predictions. Finally, we are incorporating the new growth estimates in our long-term earnings growth rate, increasing it from 3% to 5%.

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Price vs Fair Value

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BA. is trading at a 674% premium.
Price
GBX 1,394.00
Fair Value
GBX 9,429.00
Uncertainty
Medium
1-Star Price
GBX 5,974.30
5-Star Price
GBX 1,531.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

BAE is well positioned to capitalize on growth in global defense spending.

Bears

BAE depends on military funding for its sales, which is an inherently political and thus uncertain process.

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News

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Trading Information

Previous Close Price
GBX 1,392.00
Day Range
GBX 1,383.50–1,406.50
52-Week Range
GBX 883.40–1,406.50
Bid/Ask
GBX 1,392.00 / GBX 1,410.50
Market Cap
GBX 4.23 Tril
Volume/Avg
3.5 Mil / 7.0 Mil

Key Statistics

Price/Earnings (Normalized)
21.22
Price/Sales
1.85
Dividend Yield (Trailing)
2.17%
Dividend Yield (Forward)
2.17%
Total Yield
3.48%

Company Profile

BAE Systems is a British global defense, security, and aerospace company and the largest defense contractor in Europe; it is one of six prime contractors to the US Department of Defense. For reporting purposes, the company has five operating segments: electronics systems is the group's US- and UK-based electronic warfare systems; the cyber, security, and intelligence segment supplies intelligence and security solutions to the US government; platforms and services manufactures combat vehicles and munitions and performs ship repair services to the US Defense Department; the air segment includes BAE’s share of US and European air programs as well as its businesses in Saudi Arabia and Australia; and the maritime segment comprises UK land- and marine-based activities.
Sector
Industrials
Industry
Aerospace & Defense
Stock Style Box
Large Growth
Total Number of Employees
99,800
Website
https://www.baesystems.com

Competitors

Valuation

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Metric
BA.
OSK
NOC
Price/Earnings (Normalized)
 21.2210.8921.43
Price/Book Value
 4.002.084.94
Price/Sales
 1.850.811.79
Price/Cash Flow
 18.7610.5117.07
Price/Earnings
BA.
OSK
NOC

Financial Strength

Metric
BA.
OSK
NOC
Quick Ratio
 0.860.730.86
Current Ratio
 1.081.431.15
Interest Coverage
 7.3512.535.30
Quick Ratio
BA.
OSK
NOC

Profitability

Metric
BA.
OSK
NOC
Return on Assets (Normalized)
 6.08%8.49%4.88%
Return on Equity (Normalized)
 17.75%20.81%14.79%
Return on Invested Capital (Normalized)
 11.67%17.92%8.76%
Return on Assets
BA.
OSK
NOC
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