Russia’s invasion of Ukraine has prompted JP Morgan to upgrade weapons maker BAE Systems PLC (LSE:BA.), saying the attack has changed the defence industry landscape.
It sees two consequences of the Russian action. First, the US and Europe might decide they need to spend more on their defence capabilities.
And second, investors might reassess the role weapons makers play in protecting peace and democracy, thereby eroding some of the 'ESG discount' that has weighed on all defence-related stocks in recent times.
JPM has raised its price target on BAe to 630p from 555p and its investment rating to 'neutral' from 'underweight'.
Shares in BAe rose 3.3% today to 652.6p.