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Berenberg lifts BAE Systems target price

Near and long-term growth drivers at BAE Systems (BA) remain ‘compelling’ for Berenberg.

Analyst George McWhirter retained his ‘buy’ recommendation but increased the target price from £13.60 to £14.30 on the Citywire Elite Companies AAA-rated defence group, which fell 1.5% to £11.81 on Tuesday, but has gained 13.2% over the last 12 months.

‘The growth drivers for BAE Systems continue to be its maritime division, and its armoured vehicles businesses in Sweden and the US – 33% of revenue combined,’ McWhirter said.

‘Visibility is extending in each of these areas through recent contract awards and the order pipeline will remain buoyant over the coming years.’

Restocking of military equipment linked to the conflict in Ukraine will be a boon to the group, as will ‘the demand boost from the US supplemental aid package to Ukraine’.

‘Longer-term drivers beyond this are the global combat air programme fighter jet and the Aukus submarine alliance, which will run for several decades, offering good visibility,’ said McWhirter.

BERENBERG RAISES BAE SYSTEMS PRICE TARGET TO 1440 (1360) PENCE - 'BUY'

hTTps://www.msn.com/en-gb/news/world/china-sends-largest-naval-fleet-in-decades-to-region-threat-level-severe-taiwan-says/ar-AA1vzsqj?ocid=entnewsntp&pc=U531&cvid=b77bcf09559c4d71e10a7452e5b89029&ei=48

"BAE Systems has won a new $2.5 billion contract to build more CV90 combat vehicles for Denmark and Sweden, the company announced Friday. Denmark has ordered 115 new CV9035 MkIIICs, and Sweden is acquiring 50 new vehicles. The deal also includes financing more vehicles bound for Ukraine."

https://www.defensenews.com/global/europe/2024/12/06/bae-wins-25b-deal-to-supply-more-cv90-vehicles-to-denmark-sweden/#:~:text=BAE%20Systems%20has%20won%20a,more%20vehicles%20bound%20for%20Ukraine.

Agree as it has a strong order book and its latest update was very bullish.

I would add that BAE is a global power and its main business is not the USA.

I am adding each time it dips as the downtrend is due to sentiments connected to Trump/Ukraine.

Once the dust settles the SP will go back easily to £14 -£15.

A strong medium to long term hold in any diversified portfolio.

Let's hope ...

Defence Minister admits British Army would be 'wiped out in six months' in major war.

hTTps://www.msn.com/en-gb/news/uknews/defence-minister-admits-british-army-would-be-wiped-out-in-six-months-in-major-war/ar-AA1vfGuN?ocid=entnewsntp&pc=U531&cvid=dc785b69f37045a2da600062751427ee&ei=10

Loads of late buying today (over £44 millions in shares).

One of them is below (2.17 million shares purchased).

03-Dec-24 16:35:19 1,259.50 2,171,013 Buy* 1,259.00 1,259.50 27m UT

HTTps://www.msn.com/en-gb/news/world/nato-warns-of-serious-security-threat/ar-AA1vbkdn?ocid=entnewsntp&pc=U531&cvid=2c4719d295d74ea7eb64fc9a87181e2c&ei=33

Again, labour reducing and delaying defense spending while others are arming to the teeths as Russia is becoming more and more dangerous and unexpectedly volatile.

This labour will not only bankrupt the country but transform it into a defenseless lamb in the middle of woolves.

hTTps://www.msn.com/en-gb/money/other/fury-as-britain-alone-in-slashing-military-power-despite-putin-stoking-world-war-3-fears/ar-AA1v8dEc?ocid=entnewsntp&pc=U531&cvid=0c5e0c01441d47e2891fdad917b3d765&ei=51

I agree too because it's like a drop of water in the ocean.

This cannot increase EPS if the number of issued shares is in billions, nor the share price.

So Dividends are more useful to shareholders than share buybacks on here.

Citi reiterates 'buy' rating on BAE Systems.

Strange that an "underperform" from Bnak of America sunk the shares 4% while a "BUY" rating from didn't have any effect.

This shows - as Trump love to say - Everything is crooked.

Mon, 02nd Dec 2024 08:14Sharecast News

(Sharecast News) - Citi reiterated its 'buy' recommendation on BAE Systems on

Monday after the shares slumped on Friday on the back of a downgrade by Bank of America Merrill Lynch.

Citi noted the shares fell around 4% "following a competitor downgrade that, we understand, highlights the risk to the US Defence budget following the creation of DOGE (Department of Government Efficiency)".

Citi said that while it understands these concerns, BAE Systems has similar expected profit growth to US peers, better free cash flow conversion, less exposure to the US DoD - therefore less risk from DOGE - and a much lower valuation, at 14.4x 2024 EV/EBIT versus the average 17.7x.

"We therefore conclude BAE Systems is a more attractive, lower risk investment and reiterate our buy recommendation," it said.

On Friday, BofA ML downgraded its stance on the shares to 'underperform' from 'neutral', citing the risk of potential US government spending cuts overseen by Elon Musk.

I would add that Trump actually hidden message to Europeens is: "Don't count on us to protect you in the future, therefore you must buy MORE weapons- from us - and manufacture more yourselves - to be able to protecting yourselves".

When Trump will realise how much tax is contributed by US defense firms, he will retract from helping any peace deal.

How many workers will be made redundant in the US if there was no conflict ?

Thus is without adding the subcontractors huge numbers.

This is similar to the pharmaceutical industry: If they cure every disease, hospitals would close and nobody would take and thus buy any medicines.

So my conclusion is that the new world of shareholders, profit and money is calibrated to create wars and diseases to survive.

Do we need armies and big pharmas if there were no wars and illnesses ?

That is the question.

This is because someone at Bank of America wanted to buy very cheap.

Otherwise is there any logic in downgrading a company that is upgrading its numbers ?

Alive..: Who pays the highest taxes in the US ?

Probably the weapon manufacturers.

So to get more taxes they must sell weapons.

To sell weapons, to get more taxes, there must wars ...

This is because someone at Bank of America wanted to buy very cheap.

Otherwise is there any logic in downgrading a company that is upgrading its numbers ?

Either this is a younster amateurish or total stupidity.

Jeffries downgrading because they want to buy on the cheap - simple.

It's not about the Santa rally but:

The real problem is labour killing any shoots of recovery via Ed Miliband who is

the "Secretary of State for Energy Security and Net Zero" - until the economy catches up to ZERO.

It was the very Ed who knifed his brother David in the back a few years ago to replace him in the labour party.

How on earth anybody would trust such labour chameleons who are hitting the last nail in the coffin of UK economy ?

When it comes to all those stories of CO2, climate change etc. what a small country like Britain would change while China, India, the US and Russia are massively pollutiong the atmosphere ?

Without those big four polluters following the rules, the earth and its atmosphere will never be clean.

This climate change thing is either becoming a fashion or some people are definitely becoming lunatics.

So to me labour in general is acting like an ostrich hiding its head in the sand while its naked backside is exposed to the air.

Every action taken by this new stange "labour" is against the people of this country. From pensioners, to farmers to students, to every industry with higher NI for employers. They have gathered a receipt to bankrupt this country.

IMO FRES will take over struggling miners in Mexico or/and elsewhere very soon.

They need to replenish their mining portfolio to grow.

"It is not the role of governments to create jobs." - But hey have a tool to make it easy for others to create jobs.

If it has no economic role, then the governement is there only to collect taxes, drink champagne et travel for pleasure. Also it's easy to increase taxes on private sector to kill any job creation.

PETS has now an extra bill of £18 million to pay in F26.

How is it going to find the money ?

Sacking workers, reducing investment or moving parts of the business abroad with less taxes on employers ?

Labour is not only killing jobs but throwing spanners in the system of those able and willing to create jobs and prosperity.

PET is an example.

"Pets also said on Wednesday that changes to National Insurance contributions and minimum wage announced in last month's Budget are expected to increase costs by £18m in FY26."

This problem is flagged up by every retailer.

The is the result of the "friend of the working people" - The labour party, or the best friend of higher taxes.

Who cannot raise taxes on the back of working people ? How easy it is !

But creating jobs to help the economy is more difficult ...