BAE Systems PLC (LSE:BA.) has been upgraded to 'buy' by Citi on a recent share price dip and expectations that recent sales growth can be extended.
The bank said: “We are increasingly confident about the duration of 5-7% extending out beyond our 5-year base case – 10 years growth would increase fair value to 1,550-1,600p.
"As it stands, the current share price target rises to 1,440p (3%) with the short term affected by slightly worse (dollar to pound) translation.
“BAE Systems also has significant exposure to the US but is trading on 14.5 times 2024 EV/EBIT vs US peers on 16.7-18.5x, despite similar profit growth forecasts."
BAE shares rose by 1.5% to 1,292p on Monday.