BAE Systems (LSE: BA.) delivered another standout performance on the London Stock Exchange, with its share price climbing 2.44% to 1,931.0 GBX in today’s session. This robust advance underscores the company’s status as one of the top-performing stocks in the FTSE 100, driven by relentless investor demand and a powerful surge in defense sector spending.
The latest rally builds on an exceptional year for BAE Systems. The stock has soared 68% year-to-date, outpacing both sector peers and the broader market. Over the past six months alone, shares have gained more than 60%, and the one-month return stands at an impressive 14.5%. This momentum reflects not only strong operational execution but also heightened global demand for defense technology amid ongoing geopolitical tensions.
BAE’s financial performance has been equally compelling. The company reported a 14% increase in full-year sales for 2024, reaching £28.3 billion, with underlying profit also up 14% to £3.02 billion. Its order backlog hit a record £77.8 billion, up 11% year-on-year, providing clear visibility on future revenues.
Management recently reaffirmed guidance for 2025, targeting revenue growth of 7% to 9% and underlying earnings growth of 8%. Free cash flow is forecast to exceed £1.1 billion, further supporting shareholder returns.
Recent contract wins have bolstered sentiment, including major deals for armored vehicles, missile systems, and aerospace upgrades with both UK and US defense agencies. These wins, combined with a packed order book, have kept BAE Systems at the forefront of investor attention.
While the company’s shares now trade at a premium, with a price-to-earnings ratio above the FTSE 100 average, analysts remain broadly positive. The consensus target price suggests further upside, albeit at a more measured pace as the stock approaches its 52-week high. Risks remain, including potential shifts in defense budgets and currency fluctuations, but BAE’s diversified portfolio and global reach provide resilience.
In summary, BAE Systems continues to showcase formidable momentum on the LSE, reflecting both sector tailwinds and the company’s operational strength. As geopolitical uncertainties persist, the stock remains a favored pick for investors seeking exposure to the defense sector’s sustained growth trajectory.
