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BAE Systems plc ADR
(OTC:BAESY)
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Rating:69Neutral
Price Target:
$118.00
â–²(12.30% Upside)
Action:Downgraded
Date:07/31/26
The score is driven primarily by solid underlying financial performance and a notably strong earnings update with upgraded guidance and record backlog/visibility. Technicals are moderately supportive (price above key shorter and long moving averages), while valuation is the main constraint due to a high P/E that is only partly offset by the dividend yield.
Positive Factors
Record Backlog & Pipeline
A record GBP 84bn backlog and ~GBP 180bn pipeline provide multi-year revenue visibility and reduce cyclicality. That scale supports production planning, negotiating power with suppliers, and predictable revenue recognition across long program lifecycles, underpinning durable cash flow.
Negative Factors
Rising Total Debt
While net debt improved in H1, reported total debt rose materially into 2024–2025 (~$10–10.5bn), constraining balance-sheet optionality. Elevated gross leverage increases exposure to higher rates, can amplify earnings volatility and limits room for opportunistic M&A or large one-off investments.
Read all positive and negative factors
Positive Factors
Negative Factors
Record Backlog & Pipeline
A record GBP 84bn backlog and ~GBP 180bn pipeline provide multi-year revenue visibility and reduce cyclicality. That scale supports production planning, negotiating power with suppliers, and predictable revenue recognition across long program lifecycles, underpinning durable cash flow.
Read all positive factors
BAE Systems plc ADR (BAESY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$82.69B
Dividend Yield1.71%
Average Volume (3M)57.89K
Price to Earnings (P/E)29.9
Beta (1Y)0.57
Revenue Growth11.21%
EPS Growth12.59%
CountryUS
Employees104,000
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)2.80
Shares Outstanding751,007,450
10 Day Avg. Volume96,397
30 Day Avg. Volume57,892
Financial Highlights & Ratios
PEG Ratio3.19
Price to Book (P/B)4.38
Price to Sales (P/S)1.82
P/FCF Ratio22.15
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)4.47
Revenue Forecast (FY)$44.50B
BAE Systems plc ADR Business Overview & Revenue Model
Company Description
BAE Systems plc is a global defense, aerospace, and security enterprise. Its extensive operations are structured across five principal divisions. The Electronic Systems segment develops and supplies a wide array of advanced electronic solutions, i...
How the Company Makes Money
BAE Systems makes money primarily by contracting with government customers (and, to a lesser extent, prime contractors and commercial customers) to deliver defense products and services over multi-year program lifecycles. Revenue is generated thro...
BAE Systems plc ADR Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 25, 2027
Earnings Call Sentiment Positive
The call emphasized strong operational and financial momentum across sales, profit, orders and cash generation with upgraded full-year guidance and record backlog, driven by Europe, space, munitions and MBDA demand. Key positive factors include robust order intake (GBP 16.4bn), record GBP 84bn backlog, double-digit profit growth, and a strengthened balance sheet (net debt down to GBP 3.2bn). Principal risks highlighted are margin pressure in Maritime due to first-in-class programs, free cash flow sensitivity to the timing of customer advances, and the need to invest continuously to stay ahead in fast-evolving technology markets. On balance, positives materially outweigh the listed challenges.Positive Updates
Strong top-line and profitability growth
Sales grew 9% (constant currency) in H1 2026; EBIT increased 11% to GBP 1.7bn and return on sales rose 20 basis points to 10.8%. Earnings per share increased 13% vs H1 2025.
Negative Updates
Maritime margin headwinds from first-in-class programs
Maritime return on sales was 6.1% in H1, weighed down by early-stage, first-in-class programs (Type 26, Hunter Class, Dreadnought). Management expects H2 improvement and a glide path toward >7% sector margins, but near-term margin pressure remains.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong top-line and profitability growth
Sales grew 9% (constant currency) in H1 2026; EBIT increased 11% to GBP 1.7bn and return on sales rose 20 basis points to 10.8%. Earnings per share increased 13% vs H1 2025.
Read all positive updates
Company Guidance
BAE upgraded full‑year guidance: sales now expected to grow 8–10% (up 100bps), EBIT 10–12% (up 100bps) and EPS 11–13% (up 200bps), with free cash flow expected to exceed £2.0bn (excluding any further material advances). The upgrade follows a strong H1 (sales +9% cc, EBIT +11% to £1.7bn, return on sales 10.8% +20bps, EPS +13%, free cash flow £1.8bn, operating cash flow £2.1bn) and robust commercial momentum (H1 order intake £16.4bn, backlog £84bn, pipeline ~£180bn). Balance‑sheet and cash metrics underpinning the guidance include net debt down to £3.2bn, H1 capex £400m (U.S. capex expected +40% YoY), interest expense £187m and an upgraded 2024–26 cash expectation now to exceed £6.7bn (up £700m).BAE Systems plc ADR Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
66
Positive
Cash Flow
61
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 29.49B | 28.34B | 26.31B | 23.08B | 21.26B | 19.52B |
| Gross Profit | 7.65B | 7.48B | 17.23B | 15.10B | 2.77B | 2.50B |
| EBITDA | 3.84B | 3.69B | 3.97B | 3.45B | 3.06B | 3.13B |
| Net Income | 2.11B | 2.06B | 1.96B | 1.86B | 1.59B | 1.76B |
Balance Sheet | ||||||
| Total Assets | 39.65B | 37.61B | 38.14B | 32.06B | 31.46B | 27.14B |
| Cash, Cash Equivalents and Short-Term Investments | 4.33B | 3.61B | 3.38B | 4.11B | 3.36B | 3.11B |
| Total Debt | 9.10B | 9.05B | 10.15B | 6.48B | 6.97B | 6.36B |
| Total Liabilities | 27.18B | 25.70B | 26.36B | 21.34B | 20.06B | 19.47B |
| Stockholders Equity | 12.30B | 11.76B | 11.62B | 10.56B | 11.21B | 7.44B |
Cash Flow | ||||||
| Free Cash Flow | 4.51B | 2.33B | 2.76B | 2.80B | 2.15B | 1.99B |
| Operating Cash Flow | 5.42B | 3.23B | 3.92B | 3.76B | 2.84B | 2.45B |
| Investing Cash Flow | -979.74M | -898.86M | -5.27B | -541.00M | -422.00M | 66.00M |
| Financing Cash Flow | -2.47B | -2.21B | 695.00M | -2.19B | -2.33B | -2.26B |
BAE Systems plc ADR Technical Analysis
Positive
105.08
Price Trends
103.61
Positive
108.08
Positive
104.53
Positive
Market Momentum
4.44
Negative
77.11
Negative
96.71
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAESY, the sentiment is Positive. The current price of 105.08 is below the 20-day moving average (MA) of 107.15, above the 50-day MA of 103.61, and above the 200-day MA of 104.53, indicating a bullish trend. The MACD of 4.44 indicates Negative momentum. The RSI at 77.11 is Negative, neither overbought nor oversold. The STOCH value of 96.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BAESY.
BAE Systems plc ADR Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $103.74B | 23.06 | 17.43% | 1.60% | 9.13% | 10.37% | |
76 Outperform | $134.49B | 21.38 | 86.24% | 2.34% | 7.20% | 52.79% | |
76 Outperform | $290.06B | 37.43 | 11.79% | 1.30% | 11.84% | 24.93% | |
70 Outperform | $77.07B | 17.20 | 26.58% | 1.73% | 5.90% | 16.00% | |
69 Neutral | $82.69B | 29.91 | 17.49% | 1.83% | 11.21% | 12.59% | |
68 Neutral | $51.59B | 27.82 | 9.52% | 1.63% | 7.29% | 10.75% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
BAESY
BAE Systems plc ADR
119.78
29.35
32.45%
GD
General Dynamics
392.05
82.58
26.68%
LHX
L3Harris Technologies
286.67
20.66
7.77%
LMT
Lockheed Martin
587.95
172.89
41.65%
NOC
Northrop Grumman
571.58
0.30
0.05%
RTX
RTX
223.03
70.66
46.37%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.