2 August 2023
If you are covering BAE Systems’ latest financial results, please find below a comment from Jarek Pominkiewicz, equity research analyst at Quilter Cheviot:
“BAE Systems delivered a very strong set of results this morning, with its operating profit 7% ahead of market expectations. This has been driven by a strong order intake increasing the backlog to a new all-time high, with more opportunities in the pipeline, underpinning solid medium-to-longer term growth outlook.
“The company also announced an extension of its share buy-back scheme, equivalent to around 5% of BAE’s market cap. This is not an insignificant amount and demonstrates clearly management’s confidence in the growth and cash generation prospects of the group.
“It also suggests that large merger and acquisition is likely off the table – in the recent months BAE was rumoured to be in the running for Ball Aerospace – a positive in our view, given how expensive such a deal would likely have ended up being. Furthermore, a major step up in defence budgets in Western Europe, which thus far have lagged moves by their Central and Eastern European NATO peers, would offer an even stronger catalyst for the likes of BAE.”
