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BAE Systems PLC ADR BAESY

Morningstar Rating
$65.13 +0.89 (1.39%)
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Company Report

BAE Systems Earnings: Strong Set of Results, Raising Our Valuation on Improved Execution

Wide-moat BAE Systems upgraded 2024 guidance on the back of another strong set of results for 2023, with a record backlog of GBP 69.8 billion, representing more than 3.5 times annual sales. After incorporating the updated guidance, we are increasing our fair value estimate from GBX 1,170 to GBX 1,330 on the back of increased profitability for the air and platform divisions. In the midterm, we expect margin for the air sector and platforms to slightly increase from current levels driven by platforms running at full phase production and a higher share of aftermarket revenue.

Price vs Fair Value

BAESY is trading at a 4% discount.
Price
$65.13
Fair Value
$31.00
Uncertainty
Medium
1-Star Price
$91.20
5-Star Price
$49.30
Economic Moat
Zvgr
Capital Allocation
Mhkvpqdtb

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.

Is it the right time to buy, sell, or hold?
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News

Trading Information

Previous Close Price
$64.24
Day Range
$64.5265.19
52-Week Range
$43.6865.19
Bid/Ask
$64.70 / $65.20
Market Cap
$49.30 Bil
Volume/Avg
112,751 / 232,128

Key Statistics

Price/Earnings (Normalized)
22.32
Price/Sales
1.74
Dividend Yield (Trailing)
2.16%
Dividend Yield (Forward)
2.16%
Total Yield
3.62%

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 U.S. Department of Defense. For reporting purposes, the company has five operating segments: electronics systems is the group's U.S.- and U.K.-based electronic warfare systems; the cyber, security, and intelligence segment supplies intelligence and security solutions to the U.S. government; platforms and services manufactures combat vehicles and munitions and performs ship repair services to the U.S. Defense Department; the air segment includes BAE’s share of U.S. and European air programs as well as its businesses in Saudi Arabia and Australia; and the maritime segment comprises U.K. land- and marine-based activities.
Sector
Industrials
Industry
Aerospace & Defense
Stock Style Box
Large Growth
Total Number of Employees
99,800

Competitors

Valuation

Metric
BAESY
OSK
BA
Price/Earnings (Normalized)
22.3211.35
Price/Book Value
3.671.98
Price/Sales
1.740.761.56
Price/Cash Flow
17.6611.5564.93
Price/Earnings
BAESY
OSK
BA

Financial Strength

Metric
BAESY
OSK
BA
Quick Ratio
0.970.730.28
Current Ratio
1.071.451.14
Interest Coverage
9.1212.410.18
Quick Ratio
BAESY
OSK
BA

Profitability

Metric
BAESY
OSK
BA
Return on Assets (Normalized)
6.04%7.89%−1.22%
Return on Equity (Normalized)
16.84%19.24%
Return on Invested Capital (Normalized)
11.43%16.82%0.74%
Return on Assets
BAESY
OSK
BA
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