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BAE Systems PLC ADR BAESY Stock Quote

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Morningstar‘s Stock Analysis BAESY

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Is it the right time to buy or sell?
Is it the right time to buy or sell?

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Economic Moat


Capital Allocation


BAE Systems Maintains Guidance Despite Supply Chain Headwinds; Shares Overvalued

Joachim Kotze, CFA Equity Analyst

Analyst Note

| Joachim Kotze, CFA |

Wide-moat BAE Systems is inching along and performing in line with expectations. Sales increased by 3% on an organic basis while EBIT grew by 4%, supported by a slight margin increase. We maintain our GBX 700 fair value estimate and believe shares are overvalued at current levels. As a popular income stock, the dividend increased by 5% and offers a current yield of 3.5%. We see greater capacity for shareholder returns through dividends and buybacks as the pension deficit swung into surplus during the half, eliminating the need for surplus payments.

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Key Statistics BAESY

Company Profile BAESY

Business Description

BAE Systems is a British global defense company. BAE has a dominant position in the U.K., is a top-six supplier to the U.S. Department of Defense, and has a strong presence in key defense markets (eg. Saudi Arabia and Australia). Exposure to programmes is well diversified. BAE derives 45% of sales from services and support and 35% from major programmes such as the F-35 Lightning II and Eurofighter Typhoon fighter jets. The balance of sales is derived from electronic systems and cyber intelligence.

6 Carlton Gardens
London, SW1Y 5AD, United Kingdom
T +44 1252373232
Industry Aerospace & Defense
Most Recent Earnings
Fiscal Year End Dec 31, 2022
Stock Type
Employees 91,400

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