BAE Systems (BA) AI Stock Analysis

• Market Cap: $54.04B
• Dividend Yield: 1.88%
• Average Volume (3M): 5.55M
• Price to Earnings (P/E): 28.1
• Beta (1Y): 0.59
• Revenue Growth: 11.60%
• EPS Growth: 8.03%
• Country: UK
• Employees: 107,400
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.35
• Shares Outstanding: 3,003,981,000
• 10 Day Avg. Volume: 5,547,230
• 30 Day Avg. Volume: 5,548,765
• PEG Ratio: 2.70
• Price to Book (P/B): 2.98
• Price to Sales (P/S): 1.32
• P/FCF Ratio: 12.53
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 2.35
• Enterprise Value/Gross Profit: 28.03
• Enterprise Value/Ebitda: 17.13
• 1Y Price Target: $2,101.88
• Price Target Upside: 16.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 74.36
• Revenue Forecast (FY): $3.04T

• Rating: 66 Neutral
• Price Target: 2,010.00p ▲(10.99% Upside)

BAE Systems' overall stock score is driven by strong financial performance, which is the most significant factor. However, technical analysis indicates potential short-term weakness, and the valuation suggests the stock may be overvalued. These factors collectively result in a moderate overall score.

Positive Factors

Negative Factors

BAE Systems Business Overview & Revenue Model

Company Description

BAE Systems plc provides defense, aerospace, and security solutions worldwide. The company operates through five segments: Electronic Systems, Cyber & Intelligence, Platforms & Services (US), Air, and Maritime. The Electronic Systems segment offers electronic warfare systems, navigation systems, electro-optical sensors, military and commercial digital engine and flight controls, precision guidance and seeker solutions, military communication systems and data links, persistent surveillance systems, space electronics, and electric drive propulsion systems. The Cyber & Intelligence segment provides solutions to modernize, maintain, and test cyber-harden aircraft, radars, missile systems, and mission applications that detect and deter threats to national security; systems engineering, integration, and sustainment services for critical weapons systems, C5ISR, and cyber security; and solutions and services to intelligence and federal/civilian agencies. It also offers data intelligence solutions to defend against national-scale threats, protect their networks, and data against attacks; security and intelligence solutions to the United Kingdom government and allied international governments; anti-fraud and regulatory compliance solutions; and enterprise-level data and digital services. The Platforms & Services (US) segment manufactures combat vehicles, weapons, and munitions, as well as provides ship repair services and the management of government-owned munitions facilities. The Air segment develops, manufactures, upgrades, and supports combat and jet trainer aircraft. The Maritime segment designs, manufactures, and supports surface ships, submarines, torpedoes, radars, and command and combat systems; and supplies naval gun systems. It also supplies naval weapon systems, missile launchers, and precision munitions. The company was founded in 1970 and is based in Farnborough, the United Kingdom.

How the Company Makes Money

BAE Systems generates revenue primarily through the sale of defense and aerospace products, as well as through service contracts. Key revenue streams include contract awards from government clients for defense systems and services, sales of military vehicles and naval ships, and revenue from cybersecurity and intelligence services. The company often collaborates with governments and other defense contractors on large projects, which enhances its ability to secure substantial contracts. Additionally, long-term maintenance and support agreements for its products provide ongoing revenue, contributing to its financial stability.

BAE Systems Financial Statement Overview

Summary

BAE Systems demonstrates strong financial performance with consistent revenue and profit growth. The company has a robust market position and operational efficiency, despite rising leverage. The balance sheet is solid with a strong equity base, and cash flow generation supports growth initiatives.

Income Statement

BAE Systems shows a strong upward trajectory with consistent revenue growth from $18.3 billion in 2019 to $26.3 billion in 2024, indicating a robust market position. The gross profit margin improved significantly, reaching approximately 65.5% in 2024, demonstrating efficient cost management. Net profit margin has remained stable at around 7.4%, reflecting steady profitability. EBIT and EBITDA margins have also shown positive trends, highlighting operational efficiency. This consistent performance indicates strong industry positioning and effective management.

Balance Sheet

The balance sheet showcases a stable financial position with stockholders' equity growing from $5.4 billion in 2019 to $11.6 billion in 2024. The debt-to-equity ratio has increased, reflecting higher leverage, but remains manageable. The equity ratio improved over the years, indicating a solid capital structure. While the return on equity has been strong, it slightly dipped in 2024 due to elevated equity levels. Overall, the financial health is solid, though the rising debt levels should be monitored.

Cash Flow

BAE Systems displays strong cash flow generation with a growing operating cash flow, reaching $3.925 billion in 2024. Free cash flow has also shown growth, indicating effective capital expenditure management. The operating cash flow to net income ratio is robust, underscoring the company's ability to convert profits into cash. Although free cash flow slightly decreased in 2024 compared to 2023, the overall cash flow position is healthy, supporting further growth and investment.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	27.41B	26.31B	23.08B	21.26B	19.52B	19.28B
Gross Profit	2.29B	17.23B	15.10B	5.91B	5.19B	5.14B
EBITDA	3.75B	3.97B	3.45B	2.81B	2.91B	2.41B
Net Income	1.98B	1.96B	1.86B	1.59B	1.76B	1.30B
Balance Sheet
Total Assets	36.00B	38.14B	32.06B	31.46B	27.14B	27.94B
Cash, Cash Equivalents and Short-Term Investments	2.15B	3.38B	4.11B	3.36B	3.11B	2.96B
Total Debt	9.43B	10.15B	6.48B	6.86B	6.36B	6.68B
Total Liabilities	24.99B	26.36B	21.34B	19.06B	18.66B	22.34B
Stockholders Equity	10.84B	11.62B	10.56B	11.21B	7.44B	4.64B
Cash Flow
Free Cash Flow	2.04B	2.76B	2.80B	2.00B	1.82B	508.00M
Operating Cash Flow	3.02B	3.92B	3.76B	2.70B	2.28B	985.00M
Investing Cash Flow	-1.20B	-5.27B	-541.00M	-548.00M	-14.00M	-2.08B
Financing Cash Flow	-2.46B	695.00M	-2.19B	-2.06B	-1.99B	1.20B

BAE Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1811.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BA, the sentiment is Negative. The current price of 1811 is below the 20-day moving average (MA) of 1873.09, below the 50-day MA of 1902.49, and above the 200-day MA of 1719.61, indicating a neutral trend. The MACD of -22.52 indicates Positive momentum. The RSI at 34.68 is Neutral, neither overbought nor oversold. The STOCH value of 19.49 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:BA.

BAE Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SRP	76 Outperform	£2.52B	53.21	5.21%	1.41%	0.84%	-62.73%
CHG	73 Outperform	£1.54B	39.43	―	1.45%	―	―
RR	71 Outperform	$96.52B	16.75	3725.44%	0.93%	9.62%	146.74%
BAB	67 Neutral	£6.06B	24.72	49.75%	0.55%	10.08%	49.21%
BA	66 Neutral	$54.04B	28.12	17.59%	1.88%	11.60%	8.03%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
QQ	56 Neutral	£2.53B	-13.93	-23.92%	1.99%	1.02%	-240.44%

BAE Systems Corporate Events

BAE Systems Reports Strong Half-Year Results and Upgrades Guidance

BAE Systems Plc is a leading global defense, aerospace, and security company, known for providing advanced technology-led solutions to help customers maintain security across land, sea, cyber, and space domains. In its latest half-year report for 2025, BAE Systems reported strong operational and financial performance, leading to an upgrade in its full-year guidance. Key financial highlights include an 11% increase in sales to £14.6 billion and a 13% rise in underlying EBIT to £1.55 billion. The company also secured £13.2 billion in orders, maintaining a robust order backlog of £75.4 billion. BAE Systems continues to invest in its capabilities, with significant advancements in major programs like the Global Combat Air Programme and the construction of Dreadnought Class submarines. The company is also expanding its facilities and workforce to support future growth. Looking ahead, BAE Systems remains confident in its ability to deliver strong financial returns, supported by its diverse product portfolio and strategic international collaborations.