BAE Systems’ (LSE: BA.) shares have rocketed 293% in the last five years. With dividends reinvested, the total return blasts past 300%. Do you really need me to tell you why? <\/p>\n
A quick glance at the news headlines supplies the answer. We live in a warlike world, and this FTSE 100 defence manufacturer makes the ships, submarines, aircraft, tanks, missiles and drones we need to defend ourselves. <\/p>\n
As the West rearms, sales are soaring. Check out group revenues for the last five years. <\/p>\n
2025 \u2013 \u00a330.66bn <\/p>\n
2024 \u2013 \u00a328.34bn <\/p>\n
2023 \u2013 \u00a325.28bn <\/p>\n
2022 \u2013 \u00a323.26bn <\/p>\n
2021 \u2013 \u00a321.31bn <\/p>\n
Future revenues look promising <\/p>\n
The future looks solid too. BAE Systems benefits from multi-decade revenue security, largely because sales are based on long-term government orders. Today, its order book stands at \u00a362.7bn. The backlog’s even bigger at \u00a384bn. That also protects it against an economic downturn. <\/p>\n
BAE recently raised its full-year guidance, projecting adjusted profit (EBIT) growth of 10%-12%, alongside strong cash flow generation. It’s anticipating \u00a32bn of cash this year. <\/p>\n
With a modest trailing yield of 1.63%, BAE Systems may not look like much of a dividend stock, but don’t be fooled. The board has increased dividends for 22 consecutive years, and payouts are covered roughly twice by earnings. It’s also funding a \u00a31.5bn share buyback too. <\/p>\n
This FTSE 100 stock’s expensive <\/p>\n
Investors can’t get enough of BAE Systems, with the stock leaping almost 20% in the last month alone. The drawback is that its shares are now expensive. The price-to-earnings ratio’s now almost 30, well above the FTSE 100 average of around 16. <\/p>\n
BAE’s flying high today but what does the next year hold? The 19 analysts offering one-year share price forecasts produce a consensus target of 2,346p. If correct, that would see the shares climb a less-than-dazzling 8.6% from today’s price of 2,160p. That’s hardly surprising. The air’s getting thin at this altitude. <\/p>\n
Of the 21 analysts giving stock ratings in the past three months, most are positive. But one in three suggests investors Hold rather than Buy. <\/p>\n
Strong Buy:\u00a0\u00a0\u00a0\u00a0 11 <\/p>\n
Buy:\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1 <\/p>\n
Hold:\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 7 <\/p>\n
Sell:\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1 <\/p>\n
Strong Sell\u00a0\u00a0\u00a0\u00a0\u00a0 1 <\/p>\n
So what are the threats? <\/p>\n
Every stock has risks. BAE Systems has to fulfill that massive order backlog on time. Labour shortages and supply chain deals can threaten that. So can technical issues and disputes over costs. <\/p>\n
While the West and its allies need to spend more on defence, politicians could struggle to come up with the money. We’ve seen the pressures in the UK, with huge political rows over spending. <\/p>\n
I think BAE Systems shares are still worth considering today, with a long-term view. I say this with a heavy heart, but given the state of the world, its products are likely to remain in demand for some years to come. If worried about today’s sky-high valuation, consider buying the shares on a dip. <\/p>\n
Should you invest \u00a35,000 in BAE Systems right now? <\/p>\n
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. <\/p>\n
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if BAE Systems made the list? <\/p>\n
\u00a0See The Six Stocks <\/p>\n
Harvey Jones owns shares in BAE Systems. <\/p>\n
The post By August 2027, red-hot BAE Systems shares could go from 2,160p to\u2026.<\/a> appeared first on The Twelfth Magpie<\/a>. <\/p>\n More reading <\/p>\n The Twelfth Magpie 2026 <\/p>\n","protected":false},"excerpt":{"rendered":"BAE Systems’ (LSE: BA.) shares have rocketed 293% in the last five years. With dividends reinvested, the total…\n","protected":false},"author":2,"featured_media":108008,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[21224],"tags":[21234,8160,3702],"class_list":["post-108007","post","type-post","status-publish","format-standard","has-post-thumbnail","category-bae","tag-bae","tag-bae-systems","tag-shares"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/117132456169273852","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/108007","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=108007"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/108007\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/108008"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=108007"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=108007"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=108007"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}