Defence technology group BAE Systems (BA.) confirmed its FY financial targets after a ‘strong’ start to 2026. The firm said it had seen an increase in defence spending across all its key markets.
Strong performance
The group has traded well in the first four months of 2026, ‘delivering strong operational and financial performance’. Security threats continue to grow around the world leading governments to increase defence spending.
The combination of increased defence spending with strong portfolio alignment ‘provides a supportive backdrop for growth over the medium term’. The firm sees ‘significant opportunities’ in space systems, missile and air defence systems, drones and counter drone technology, electronic warfare, combat aircraft, combat vehicles, frigates and submarines.
Notable new orders so far this year include £2.5 billion for Turkey’s Eurofighter programme and £1.1 billion for European missile systems. The firm has also won new orders for missile and satellite tracking and other space-related systems.
As a result, it is sticking to its guidance of a 7% to 9% increase in sales to between £32.8 billion and £33.5 billion. Underlying EBIT and EPS are both seen up 9% to 11% with mid-range estimates of £3.63 billion and 82.7p respectively
With hostilities paused in the Middle East, BAE shares have been drifting for the last month. However, they are still up nearly 18% since the start of the year putting them comfortably ahead of the FTSE 100.
With the US no longer seen as a reliable partner in terms of defence, European countries are stepping up their spending. This is a huge long-term opportunity for BAE, and its portfolio is well suited to the task.
It wasn’t long ago that defence companies were considered no-go areas for some investors. In the new world order, few people can afford to be that picky and the future looks bright for BAE.
Read the press release here:
https://investors.baesystems.com
