BAE Stock Is Trading at 1,267. What’s the Forecast?

BAE Systems PLC, a UK multinational aerospace, defense and information security firm, is in the spotlight currently. Its shares (with a ticker: BA) traded at £1,288 on Thursday and opened the session with £1,234 on Friday. The stock shaved off 0.93% yesterday, trading in the bearish territory.

However, the whole market plunged into the red on Thursday, so BA followed a broader trend. The FTSE 100 Index UKX declined by 1.01% to 8,283.36, as well. Despite the fall, BAE share price UK ended the last session £1.30 lower than its 52-week high hit on June 3, 2024.

Moreover, its trading volume reached 5.2 million, surpassing its 50-day average volume of 5.1 million. Thus far, BA’s price movements indicate that the stock remains strong.

Since 2017, this London-based company has been the top manufacturer in the United Kingdom. It takes first place among the defence contractors in Europe and seventh place worldwide.

BAE Systems share price chart shows that the stock fluctuated between a high of £1,349 and a low of £1,278 over the last 12 months. It mostly traded in the green, though, showing a bullish tendency and climbing higher steadily, especially over the last few months.

Investors’ optimism: What Makes BA So Attractive?

On Thursday, the company reported that it increased its 2024 forecasts. According to the CEO, the defence group’s orders for military kit deliveries are soaring. Its bolt-on acquisition in the United States also bolstered the stock. Consequently, the management expects higher returns at the end of this quarter.

According to the reports, military spending has surged significantly during the last couple of years. Analysts think the Ukraine war made the governments overview their defences, and they’re now trying to strengthen their military resources.

That works perfectly for the BEA System, with its order number skyrocketing. The company is now expecting its annual underlying earnings (EBIT) to jump to 14% from the current 12%. In the previous guidance, it forecasted 13% growth from 11%.

The team also changed the sales percentage from the previous 10%-12% to the current – 12%-14%.

While this is good news for this intelligence and security business shareholders, some analysts warn that such high demand might not last in the long term. It’s mainly tied to the Ukraine war situation and will wane eventually. When that happens, the stock price will also decline on the London Stock Exchange.

The UK’s New Policy Might Negatively Influence the Company

This firm generates a quarter of its current revenues in Britain. However, a new Labour government announced publishing a new defence review in 2025. Some analysts speculate that it might mean reduced orders for the BEA System.

The company’s Chief Executive Charles Woodburn thinks that there is no reason for worrying, though. He stated that their portfolio is well-diversified, and the firm can weather any obstacles on its way.

Despite Woodburn’s optimistic announcement, this session started in the bearish territory for BAE share price today. The stock exchanged hands at 1,267.58 GBX this morning.

Overall, it has gained 17% this year, though. So, this week’s bearish trading won’t deplete its winnings easily.

What Is The BAE Systems Share Price Forecast?

Analysts’ consensus forecast shows that the stock will recover soon and continue soaring. Moreover, the firm increased its half-year dividend by 8%. Thus, shareholders will receive higher dividend yields this year.

Besides, as we have mentioned, its purchase of US Ball Aerospace significantly bolstered the stock. It was renamed the company Space and Mission Systems, and thus far, it’s performing well.

BEA is building combat vehicles for the United States. It recently finished working on Typhoon fighter jets for Qatar, but the main project is building submarines for the UK.

According to management, US Ball Aerospace’s purchase skyrocketed its sales growth. It paid £4.4 billion for this company. In addition, the firm reported that its order book soared by  £1.6 billion at the end of June 2024. Currently, it stands at a whopping £59.6 billion.

Analysts expect sales growth to reach approximately 14% this year. However, the consensus rating for this stock is a Moderate Buy, based on zero sell ratings, 3 hold ratings and 2 buy ratings.

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