The City likes a good war chest, and BAE Systems PLC (LSE:BA.) has been busily filling its own.
UBS reckons orders this year already amount to about £26 billion, thanks to a flurry of big-ticket contracts, including a $13.5 billion deal for Norwegian frigates and a $1.7 billion order for American laser-guided rockets.
By year end, that could swell to £36.5 billion, a 7% increase on 2024.
The company will deliver its third-quarter update in mid-November. UBS does not expect fireworks, but it sees scope for guidance to look a little too cautious.
Sales growth of 10% is already at the top of management’s 8–10% range, while operating profits are tracking 15% ahead of last year, versus official guidance of 9–11%.
The momentum is not just about the headline orders. A pipeline of CV90 armoured vehicles is waiting in the wings, while a tie-up with Polish group PGZ aims to multiply production of 155mm ammunition sixteen-fold, exactly the kind of kit NATO members are scrambling to secure.
Research and development, meanwhile, is being steered towards electronics and space technology.
The shares trade at 2,046p, with UBS keeping its target price at 2,500p. That suggests about 22% upside. For a stock that has become a proxy for Europe’s defence push, the analysts think November’s update will be more about steady reassurance than fresh surprises.