BAE Systems PLC (LSE:BA.) received a share price target upgrade by Deutsche Bank analysts on Friday as European defence spending looks to keep growing.
“BAE has more exposure to the Nordic, Baltic and Eastern European states, which are the fastest growing defence markets in Europe,” the bank said in a note.
Given the ongoing war in Ukraine, Deutsche highlighted plans from the likes of Poland, Norway, Denmark, Finland and Sweden to boost defence spending.
“BAE could benefit in two ways, either via direct sales to these countries or via foreign military sales via the US,” analysts added.
Indeed, Deutsche highlighted a series of high-profile contracts from the US so far this year, including for armoured multi-purpose vehicles, alongside M109A6 and A7 Howitzers.
Demand for military jets, such as the Eurofighter, could also be revived, according to the bank, as orders come from Middle Eastern nations.
Deutsche lifted BAE’s share price target from 1,290p to 1,440p a 12% premium to Thursday’s close.
Shares climbed 1.6% to 1,306p on Friday.