BAE Systems said it maintained a solid order intake at around 25 billion pounds ($32.17 billion) in the year so far, up from 15.1 billion pounds in August. The London-listed defense company reiterated its guidance for 2024, with both sales and underlying earnings before interest and taxes expected to grow between 12% and 14% this year. Here is a selection of analysts' comments:
BAE Systems' Update Looks Encouraging
0838 GMT - BAE Systems' trading update is encouraging, says Berenberg analyst George McWhirter. The U.K. defense company's integration of Ball Aerospace and of the space and mission systems business appears to be progressing well, he says. Revenue growth is still being led by BAE's maritime and platform and services divisions, McWhirter writes in a note to investors. Its order intake stands at 25 billion pounds year to date. This implies a book-to-bill ratio at year-end of close to 1, assuming no large orders are booked in December, the analyst says. Shares are up 1.15% at 14.10 pounds. (cristina.gallardo@wsj.com)
BAE Systems Order Surge Puts Full-Year Targets in Sight
0914 GMT - BAE Systems' surge in new orders puts the U.K. defense company well on track to hit its full-year targets, says Jarek Pominkiewicz, industrials analyst at Quilter Cheviot. New orders rose to 25 billion pounds in November from 15.1 billion pounds in August. BAE is well positioned to benefit from the increasingly complex geopolitical landscape, Pominkiewicz writes in a note to investors. The company's shares may look expensive compared with historical averages, but they remain competitive against U.S. defence peers, he says. Shares are up 1.1% at 14.09 pounds. (cristina.gallardo@wsj.com)
BAE Systems' Performance Underpins Full-Year Outlook
1024 GMT - BAE Systems' trading update offers limited trading information but its performance underpins the full-year outlook, says Shore Capital. However, BAE's order intake of 25 billion pounds "looks a little light," which may cause downward pressure on the shares. The weakness of USD versus GBP is also expected to be a headwind given BAE's significant exposure to the U.S. Still, BAE is a well-managed company and the threat environment remains supportive, with the U.K. Labour government committed to spending 2.5% GDP on defense and Trump winning the presidential election, Shore says. It reiterates a hold position on the stock. (alistair.macdonald@wsj.com)
BAE Systems Order Intake Is Slightly Light
1105 GMT - BAE Systems' order intake of 25 billion pounds shows increasing demand for its products, but it is slightly light given the U.K. defense company's leading market position, says Shore Capital analyst Jamie Murray. This might disappoint some investors, and could keep the shares trading flat or modestly down, he notes. Shares are up 0.43% at 14 pounds. (cristina.gallardo@wsj.com)
BAE Systems Set to Benefit From Defense Upturn in Europe, Asia
1108 GMT - BAE Systems will benefit from the European and Asian defense upturn expected in the coming decade, JPMorgan analyst David Perry says. Recent news has been overwhelmingly positive for the defense group, he notes, including the U.K.'s plan to increase defense spending by 5.4% in 2024-25 and the expectation that U.S. President-elect Donald Trump will put pressure on European governments to raise it further. However, BAE's shares are still trading between 8% and 11% lower than U.S. defense companies, Perry writes in a note to investors. "We think BAE should trade on at least the same multiple as its U.S. peers given its financial performance and, potentially, superior top-line growth prospects in the coming years," he says. Shares are up 0.4% at 13.99 pounds. (cristina.gallardo@wsj.com)
(END) Dow Jones Newswires
November 12, 2024 06:32 ET (11:32 GMT)
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