BAE Systems shares (LON: BA.L) are one of the largest listed UK companies by market cap, and a constituent of the FTSE 100 index. The company’s stock can be found listed on the London Stock Exchange under the symbols LON: BA. or BA.L.
The company is a British defence, security, and aerospace firm that has established itself as a leading provider of advanced technology and solutions in the defence industry. The business has strategically expanded its operations worldwide, not only in its home market but globally.
YOUR CAPITAL IS AT RISK
BAE Systems EPS and Revenue Breakdown 2020-2023
| BAE Systems | Annual EPS | Annual Revenue |
|---|---|---|
| 2020 | 40.7p | £19.30 billion |
| 2021 | 55.2p | £19.52 billion |
| 2022 | 51.1p | £21.26 billion |
| 2023 | 61.3p | £23.08 billion |
BAE is positioned as a key player in the global defence and security sector. The company’s core focus on defence, security, and aerospace products and services caters to the diverse needs of governments and commercial clients.
In addition to its core operations, it has, over the years, collaborated with other technology companies to equip defence programs with digital solutions. The company’s divisions include air, land, cyber security & intelligence, electronics, and services.
BAE Systems Share Price & Dividend Yield
The Russian invasion of Ukraine and, a year later, the conflict in the Middle East have resulted in BAE Systems’ share price rising significantly over the last couple of years as demand for the company’s products and services has increased. Geopolitical tensions in other regions of the world have also resulted in increased demand. As of March 31, 2024, BAE Systems shares have risen 21% for the year-to-date and 37% over the last 12 months.
BAE Systems does pay dividends, with its current dividend yield currently at 2.22%.
Defence, Aerospace and Security Industry Comparison
YOUR CAPITAL IS AT RISK
BAE Systems Share Price Forecast
In a recent note, Citi analyst Charles Armitage restarted coverage of BAE Systems with a Neutral rating and 1,400p price target, telling investors the company’s current share price largely reflects the accelerated medium-term outlook.
In February, Jefferies analysts cut BAE Systems to Hold from Buy, citing the company’s current valuation for the re-rating. Furthermore, Jefferies stated that they appreciate the company’s growth-compounding potential but believe certain catalysts are needed for the stock to continue to perform.
BAE Systems was also downgraded to Underperform from Neutral at Exane BNP Paribas in January with a 1,128p price target. The bank noted BAE’s 20% outperformance in 2023, adding that aerospace and defence stocks look like a “more complex investment proposition” in 2024. The firm prefers names “with the best combination of value potential and momentum appeal.”
Our View: The run higher in BAE’s share price over the last couple of years does provide some valuation concerns that investors should consider before deciding whether to buy the stock. Even so, for income investors, with the company recently raising its dividend, it is an attractive stock.
Should I sell my bae systems shares? With LON: BA share prices up near all time highs, and trading in a range that until more recently would have seemed fanciful, we have been asked this question more than once in our trading community. Whilst we cannot answer that question for you, the data and analyst views provided may be used to form your own opinion with all the facts in mind. We hope that the overview you find here can help you to make an educated decision based on your own risk profile, your portfolio goals, and how well valued you feel LON BA continues to be.
BAE Suitability
When choosing a stock to buy, investors should consider various factors that will mostly be influenced by their personal circumstances.
BAE Systems is a major player in the defence and aerospace industry. However, it is subject to market volatility influenced by geopolitical factors. Investors with a moderate risk tolerance and an understanding of the industry’s dynamics may find BAE Systems shares suitable for their investment portfolio.
The company’s track record of dividend payments is always attractive to income-focused investors. BAE’s consistent dividend payments and potential for future dividend growth could cater to the needs of investors seeking regular income from their investments.
Assessing BAE Systems’ current valuation is crucial for investors. It has made a strong move higher over recent years, which for some may mean it is too rich. Nevertheless, understanding the company’s market performance, earnings, and financial health is essential in determining whether the current share price aligns with what you are willing to pay.
The valuation will also relate to your investment goals. Those looking for long-term capital appreciation and potential growth opportunities in the defence and aerospace sector might find BAE Systems shares appealing.
However, there is also an ethical factor to consider here. BAE Systems’ involvement in the production of military equipment raises ethical considerations for some investors.
