BAE Systems PLC (GB:BA) has experienced significant demand for its products following the outbreak of war between Russia and Ukraine. Analysts maintain a highly optimistic outlook on the stock, rating it a Strong Buy.
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BAE Systems is a leading manufacturer and supplier of defense products for the air, land, and marine sectors. The company is known for its cutting-edge defense solutions and has markets in around 40 countries.
Let’s see what makes analysts so bullish on the stock.
The Bullish Case
Over the last month, the company’s stock has been in the red, losing 2.68% of its value. YTD, the stock has gained 8.13%. The decline contrasts with the news of the company signing various contracts with the government. Serving the government acts as a huge advantage for the company, providing a stable source of income over the long term.
Another appealing factor for investors is the dividend. The company has an above-average dividend yield of 2.76% and has been consistent in its payouts since 2007. In 2022, BAE Systems saw a 7.6% increase in its total dividends, with the amount rising to 27.0p per share compared to 25.1p per share in 2021. Moving forward, analysts expect a further increase of 7% in dividends in 2023 and 2024.
New Ratings
Today, Ian Douglas from UBS reiterated his Buy rating on the stock while lowering his price target from 1,150p to 1,100p. His price target implies a 19.6% growth rate in the share price.
Yesterday, Jefferies analyst Chloe Lemaire also confirmed her Buy rating, predicting a similar upside of 19.6% in the share price.
Prior to this, 11 days ago, analysts from J.P. Morgan and Deutsche Bank also maintained their Buy ratings on the stock.
Is BAE Stock a Buy or Sell?
According to TipRanks, BA stock has a Strong Buy rating based on a total of nine recommendations, of which seven are Buy.
The average price target is 1,096.4p, which is 19% above the current trading levels.
Ending Thoughts
BAE Systems’ stock offers various attractive aspects for investors. The recent decline in its share price could be seen as a favorable opportunity for investors with a long-term investment horizon.
