JP Morgan has raised its price target on BAE Systems PLC (LSE:BA.) to 1,850p, up from 1,800p, citing growing confidence in future drone sales.
The American bank has also nudged up its earnings forecasts by 1 to 3% a year through to 2030, based on expected orders that were not previously factored in.
The note follows BAE’s recent capital markets day, which focused on its Air division, the source of nearly a third of group sales and profits.
JPM sees further upside if Eurofighter jet production ramps up as expected.
BAE is targeting an increase from 12 to around 24 aircraft per year, though the bank has not yet included that in its model as it waits for contracts to be confirmed.
BAE remains rated ‘overweight’ by JP Morgan. The shares were up 1.6% at 1,700.5p.