BAE Systems: Europe's Defense Boom Still Isn't Fully Priced In
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Dhierin BechaiInvesting Group LeaderFollow5ShareSaveCommentsSummaryBAE Systems remains a Buy, with a $35.50 price target and 13% upside, supported by robust order intake and expanding European defense budgets.Sales grew 10%, and backlog reached £83.6 billion, supporting high single-digit growth, though margin expansion is constrained by early-stage program ramp-ups.2026 guidance calls for 7-9% sales growth and 9-11% EBIT growth, but EBITDA margins will face pressure as lower-margin segments expand rapidly.Despite trading above its 3-year median EV/EBITDA, BAESY still lags peers, and ongoing investments plus debt reduction post-Ball Aerospace acquisition underpin long-term attractiveness.Looking for a helping hand in the market? Members of The Aerospace Forum get exclusive ideas and guidance to navigate any climate. Learn More » Alexandre Tziripouloff/iStock Editorial via Getty Images European defense contractor BAE Systems (BAESY, BAESF) has gained 33.7% since my last report, outperforming the S&P 500’s 3.4% decline. The performance matches and even exceeds my bullish view supported by expanding This article was written byDhierin Bechai23.31K FollowersFollowDhierin-Perkash Bechai is an aerospace, defense and airline analyst. Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.