BAE Systems PLC (LSE:BA.) shares flew 2% higher to 1,897.5p after Turkey signed a £5.4bn contract for 20 Eurofighter Typhoon jets, a deal that Deutsche Bank described as “a clear positive” for the defence group.
The order, announced just before the market close, will see the aircraft assembled in the UK, giving BAE the lion’s share of the work as lead integrator.
The contract, valued at about £270 million per jet including weapons and integration, should deliver around £4.6 billion to BAE once its share of the MBDA missile partnership is included.
Engines for the fighter are usually made by Rolls-Royce Holdings PLC (LSE:RR.).
Deutsche said the order would be accretive to earnings in BAE's Air division, with the bulk of the benefit felt in the UK manufacturing base.
Citi estimates the new aircraft are worth 15-20p a share to BAE, with a potential further boost of around 10p a share if Turkey follows through on plans to buy 24 refurbished Typhoons from Qatar and Oman.
Those second-hand jets are likely to be upgraded by BAE, adding another revenue stream.
Both banks remain upbeat on the shares, with Deutsche setting a target price of 2,220p.
The Turkish deal underscores the continuing global demand for Western-built defence hardware... and gives BAE’s order book another sizeable lift as governments rearm.