Russia’s invasion of Ukraine has put the spotlight back on weapons makes such as BAE Systems, according to Deutsche Bank, which has raised its target price to 860p to 670p.
The war has resuscitated the need for military platforms that encompass high technology components, such as tanks, fighter jets, submarines and surface vessels, said the broker.
BAE Systems is in that spot, adds the broker, with 41% of sales exposed to platforms and 21% to electronic systems.
A 35% exposure to short-cycle business and services also positions it to benefit from an early ramp-up in spending.
Buy is its view, with the prospect of higher organic growth and improved cash flow behind the increased target price.
Shares rose 0.6% to 769.8p.