12 November 2024
If you are covering BAE’s latest results, please see the following comment from Jarek Pominkiewicz, industrials analyst at Quilter Cheviot:
"BAE Systems, one of the world’s leading defence companies, continues to enjoy a strong order pipeline as global uncertainties drive governments to bolster their defences. The company has reported a robust £25 billion in new orders this year, which is a leap from £15 billion just six months ago. This surge puts BAE well on track to hit its full-year targets, with orders now covering almost 90% of projected revenue for 2024.
"With the UK government ramping up its defence spending and global initiatives like the UK-Italy-Japan fighter jet program gaining traction, BAE is poised to benefit from an industry-wide tailwind. The backdrop is only made stronger by growing calls for European and Asian allies to increase their own military investments.
"BAE’s financial guidance remains solid, with anticipated double-digit growth in both revenue and operating earnings for the year, reinforcing its position as one of the leaders in the global defence industry.
"In terms of valuation, BAE’s shares may look expensive compared to historical averages, but they remain competitive against U.S. defence peers. The stock is currently trading at a level that reflects both its current strength and future growth prospects, though it’s worth noting that BAE has also outperformed its sector, delivering a 9% gain since the summer.
"BAE Systems is effectively positioned to navigate today’s complex geopolitical landscape, balancing strong financials with a growing order book."
