Deutsche Bank has raised its price target for BAE Systems PLC (LSE:BA.) from 1,510p to 1,900p, citing stronger prospects for the defence contractor across key markets.
The upgrade reflects a broader re-rating of European defence stocks, as rising geopolitical tensions prompt governments to boost military spending.
Analyst Christophe Menard said BAE is set to benefit from a more supportive outlook in the United States, renewed defence focus in Europe, and an upcoming UK Strategic Defence Review, which sets government priorities for defence and security.
While there is some uncertainty over the timing of major Typhoon jet orders from Saudi Arabia, Turkey and Qatar, Deutsche Bank noted that BAE’s overall order flow remains healthy. Exposure to US tariffs is seen as manageable.
The bank said it had adjusted its earnings forecasts partly to reflect foreign exchange movements. Investors will be watching BAE’s next trading update on 7 May and a strategy day on 13 May.
The shares were flat a 1,673.17p.