Latest news with #BAESystems
Yahoo
17 hours ago
- Business
- Yahoo
BAE Systems: here's the latest dividend and share price forecast!
A rupturing of the geopolitical landscape has supercharged the BAE Systems (LSE:BA.) share price in recent years. The FTSE 100 defence giant has risen 233% in value since the start of 2022, a rally first sparked by Russia's invasion of Ukraine. Since then, orders, sales, and profits have rocketed higher as broader spending by NATO members has increased. Fears over Chinese expansionism and fresh conflict in the Middle East have further reinforced military-related spending. Even after rising 38% in the last 12 months alone, the Square Mile's brokers broadly believe BAE Systems shares will continue to rise over the near term. There are 12 brokers who currently have ratings on the FTSE share. As the chart shows, the average price target among them is just over £20 per share, representing a 9% increase on current levels of approximately £18.36. But the number crunchers aren't unanimous in their largely bullish view. One especially optimistic analyst thinks BAE's share price will rise as high as £23.50 per share. But at the other end of the scale, one broker thinks it will drop back to £16. There's a lot of cash sloshing around in the company's coffers, underpinning the City's bright forecasts. Free cash flow was £2.5bn on 2024, and the business predicts this will be 'in excess of £5.5bn' in the three years to 2026. That's up from a prior forecast of above £5bn. Reflecting this, City analysts also believe annual dividends will continue rising sharply over the next couple of years at least: A 35.7p per share payout is tipped for 2025, up 8% year on year. A 39.4p per share dividend is expected next year, up 10%. If these forecasts are accurate, the dividend yield is 1.9% and 2.1% for these years. That's below the FTSE 100 long-term average of between 3% and 4%. However, expected dividend growth is better than the 1.5% to 2% increase analysts tip for the broader blue-chip index. It will also keep BAE's long record of annual dividend increases going (cash rewards have risen each year since 2012). Based on City expectations, then, BAE Systems may look to some like an attractive share for capital gains and dividend income. But there are significant risks to buying the company. One is a potential drop in US defence spending. This is the FTSE company's single largest market and responsible for around half of revenues. There's also the danger that the growth of ESG (environmental, social, and governance) investing will limit demand for its shares. However, there are also significant investment opportunities as NATO countries ramp up defence spending. This month, all 32 group members (except Spain) agreed to splash out 5% of their GDPs on defence by 2035. To put that in context, spending averaged 2.2% across the bloc in 2024. BAE systems has the scale, the geographic footprint, and the expertise across multiple technologies to capitalise on this opportunity. This is reflected by its record order backlog of £77.8bn at the end of last year, up 77% in just three years. More major contract wins in 2025 include a $356m contract from the US army to support armoured multi-purpose vehicle (AMPV) production. While not without risk, I believe the company is worth serious consideration today. The post BAE Systems: here's the latest dividend and share price forecast! appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended BAE Systems. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
Scotsman
2 days ago
- Business
- Scotsman
A dramatic revival in shipbuilding in Glasgow is under way
BAE Systems Sign up to our Scotsman Money newsletter, covering all you need to know to help manage your money. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... As NATO leaders met in The Hague on Wednesday to make their historic re-armament pledge, about a hundred shipyard workers and managers at BAE Systems were gathering on Glasgow's Upper Clyde for the official opening of a vast new shipbuilding facility in Govan. The Janet Harvey Hall, named after the first woman to work in the yard in the second world war, is one of the largest industrial buildings in Scotland. It has to be big to accommodate the side-by-side construction – sheltered from Glasgow's notorious weather - of two Type 26 frigates that the UK's biggest defence contractor is building for the Royal Navy. In all, eight were ordered under a £7.9 billion contract with the Ministry of Defence. Advertisement Hide Ad Advertisement Hide Ad To a piped soundtrack of 1940s music including wartime crooner Vera Lynn, staff heard how the new facility was built on land once owned by Fairfields, the former Govan business that blazed a global trail for Scottish shipbuilding in the 19 th century. But as GMB union convener Kenny Smith told them: 'It also stands as a monument to the future.' PA That future can be seen in why the Type 26 is being built in Glasgow. It was in front of the same hall that Keir Starmer last month unveiled the government's Strategic Defence Review, warning the threats Britain now faces are 'more serious and less predictable than at any time since the end of the Cold War'. One of those is a marked increase in Russian submarine activity in the North Atlantic, particularly under the icy waters of the Norwegian Sea. This is where the Type 26 comes in. Described by BAE Systems as a 'frontline warfighting frigate' with 'high survivability characteristics', the vessel has been built for stealth, including an alternative electric motor to reduce noise. BAE Systems has invested £300 million in modernising its facilities in Glasgow to build the Type 26, including docks across the Clyde at Scotstoun where hulls are fully fitted out, including with a computerised 'combat management system'. A 'mission bay' towards the stern allows the deployment of drones and anti-hypersonic missiles. 'This is designed to beat the Russian sub at the cat-and-mouse game,' explains Simon Lister, a former Royal Navy vice-admiral and military attaché in Moscow who is now managing director of BAE Systems' naval ships business. Advertisement Hide Ad Advertisement Hide Ad The building of the Type 26 signifies nothing less than a dramatic revival in shipbuilding in Glasgow after decades of post-war decline. Just as sites like Govan and Belfast were vital to wartime efforts in the past, it's a revival driven by geopolitics. And it places Scotland at 'the beating heart of military shipbuilding', as Scottish Secretary Ian Murray put it last month when the first Type 26 was officially named 'HMS Glasgow' by the Princess of Wales. It's a revival that looks sustainable, too, which will matter for jobs. Annual defence spending of £2.1 billion in Scotland currently supports over 11,000 defence industry jobs, of which almost 5,000 are at BAE Systems in Glasgow. In the Netherlands, NATO committed to meet US president Donald Trump's demand to raise defence spending to five per cent of GDP by 2035. The UK has pledged as part of this to raise core defence spending to 3.5 per cent, with an additional 1.5 per cent on security- related infrastructure such as cyber security and border protection. The future cashflow prospects for defence businesses are rosy. Investors have taken notice, powering explosive growth in the share prices of European publicly listed defence companies such as Rheinmetall of Germany, Italy's Leonardo – which has an avionics and radar business in Edinburgh – and Babcock, the UK's second largest defence contractor that's building Type 31 frigates at Rosyth. Advertisement Hide Ad Advertisement Hide Ad This week, Babcock's chief executive David Lockwood declared a 'new era for defence' as his company raised its profits target. BAE Systems, whose shares are up 62 per cent so far this year, hopes it will win a contract from Norway this year to deliver five Type 26s. Developing a robust supply chain will be key. Two things announced in this week's UK Industrial Growth Strategy stand out. One is a new £400 million innovation fund to support new defence technology, while another is the creation of 'defence growth deals' for Scotland, Wales, and Northern Ireland to create 'regional industrial clusters'. In March, the government said it would launch a new 'support hub' to small and medium enterprises better access to the defence supply chain. PA 'The government has made a very clear link between increased defence spending and the effect on the economy, so this will have an effect not only in Scotland but the supply chain, a lot of which is in Britain,' says Emma Salisbury, a research fellow at the Council on Geostrategy. Notably, about half of the supply chain for the Type 26 is sourced in Britain. One unknown is whether this increase in naval activity will have any spillover effect into civilian shipbuilding. A hearing at the Scottish Parliament this week heard from Brussels-based consultancy ADS Insight that while competition from Asia had hollowed out European shipbuilding over decades, calls have started to come for a European maritime industrial strategy. Advertisement Hide Ad Advertisement Hide Ad
Daily Mail
3 days ago
- Business
- Daily Mail
Boost for Glasgow's Govan shipyard as BAE opens £300m site in which two warships can be assembled
Defence giant BAE Systems yesterday officially opened a 'unique' giant shipbuilding hall on the Clyde in which two warships can be assembled side-by-side. At 560 feet long and 260 feet wide, it will speed up work on the Type 26 destroyers in production for the Royal Navy. HMS Glasgow was launched by the Princess of Wales last month. The hall is part of £300million of improvements at BAE's shipyard at Govan in Glasgow. Previously, ships have been built in sections indoors and then assembled outside. Work on the hulls of the third and fourth ships in the order for eight destroyers – has started in the new facility, which can accommodate 500 workers per shift. It has been named the Janet Harvey Hall, after one of the first female workers at the yard in the Second World War. Simon Lister, of BAE Systems' navy ships business, said of the hall: 'It's unique. Nothing like that has been build before. It's there for a century's worth of work.' He said the ability to construct the hulls indoors would help cut production time from an expected 98 months for the first ship, to 66.
Yahoo
3 days ago
- Business
- Yahoo
Babcock shares surge 13% on stunning FY update! Can they keep climbing?
For years, Babcock International (BAB.L) shares were one of the laggards of the UK defence sector. Contract delays, cost overruns, high debts and accounting issues meant it significantly trailed the likes of BAE Systems (BA.L) and Rolls-Royce (RR.L). Yet while risks remain — it booked another £90m cost overrun provision on a Royal Navy contract — the FTSE 100 company looks a very different beast following heavy restructuring. Babcock's share price has rocketed 120% over the past year, giving it a place in the prestigious Footsie blue-chip index. Given that global defence spending's tipped to continue soaring, can the defence giant keep up its recent impressive momentum? Its share price was continuing to climb after the release of blowout full-year financials on Wednesday (25 June). They revealed a 10% rise in revenues — or 11% on an organic basis — which hit £4.83bn in the 12 months to March. Babcock's underlying profit margin improved to 7.5% from 5.4% previously. Underlying operating profit surged 53%, to £362.9m, even after accounting for that £90m provision related to its Type 31 frigate programme. On a statutory basis, profits were up 51% at £363.9m. Underlying free cash flow was £153.4m, down from £160.4m in fiscal 2024. But net debt still dropped more than £62m year on year, to £373.3m, pulling down Babcock's net-debt-to-EBITDA ratio to 0.3 from 0.8 previously. This led the company to hike the full-year dividend 30% to 6.5p per share. It also plans to repurchase £200m worth of shares this year, the first buyback in its history. Today's results show that Babcock's thriving in a market that's growing at a rate not seen since for many years. As the firm's chief executive David Lockwood puts it: 'This is a new era for defence. There is increasing recognition of the need to invest in defence capability and energy security, both to safeguard populations and to drive economic growth.' In acknowledgement of this, Babcock's also raised its medium-term sales and margin guidance. It now expects to achieve average mid-single-digit revenue growth, and an underlying operating margin of 'at least' 9%. This is tipped to rise to 8% in financial 2026, a year ahead of schedule. Analyst Mark Crouch of eToro also commented: 'With Babcock's core income derived from long-term government contracts in naval, nuclear, and aerospace defence, the company is well-positioned to capitalise on what looks set to be a sustained period of investment.' The shares soared 13% on Wednesday's update, taking its forward price-to-earnings (P/E) ratio to 22.3 times. This is substantially above a reading of 12-13 times it was trading on just a year ago. As a consequence, it'll have to keep performing strongly lest it experiences a potential share price correction. And there are risks to its impressive recent momentum, from prolonged cost overruns on key contracts, to broader supply chain issues and competitive pressures facing the broader defence industry. Yet it's important to note that Babcock's still cheaper than many of its industry peers. BAE Systems and Rolls-Royce's corresponding P/E ratios are higher at 25.5 times and 38.1 times, respectively. On balance, I think Babcock's a top stock to consider in the current climate, with fresh price gains very possible. The post Babcock shares surge 13% on stunning FY update! Can they keep climbing? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended BAE Systems and Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- General
- Yahoo
Shipbuilding hall named after 'pioneering' female electrician opens
A giant new shipbuilding hall named after a pioneering female electrician has officially opened on the River Clyde in Glasgow. The Janet Harvey Hall in Govan is big enough for two Type 26 anti-submarine warships to be built side-by-side. Ms Harvey, who worked in the Clyde shipyards from the age of 18, was one of a handful of women alongside a 100,000-strong male workforce in World War Two. The new facility is part of a £300m modernisation at BAE Systems in Glasgow. More stories from Glasgow & West Scotland More stories from Scotland The defence manufacturer is building eight Type 26 frigates for the Royal Navy. The first vessel HMS Glasgow entered the water in December 2022. HMS Belfast and HMS Birmingham are currently being built in the new hall. It measures 170m (558ft) long and 80m (262ft) wide, with two 100-tonne cranes and two more 20-tonne cranes inside. It will allow warships to be built fully undercover in Glasgow for the first time and reduce the time between ship deliveries. Simon Lister, Managing Director of BAE Systems' naval ships business, said: "The Janet Harvey Hall marks a major step forward for shipbuilding in Glasgow and will help enable efficient and safe shipbuilding for decades to come. "It's a symbol of pride, not just for our skilled workforce who bring these ships to life, but for the entire city." Janet Harvey's nieces joined Glasgow's Lord Provost to cut the ribbon on the facility. Ms Harvey died on Armistice Day in 2023 at the age of 101. She was recognised for her "significant contribution" to the UK's war efforts when she was awarded an Honorary Degree for engineering by Glasgow Caledonian University at the age of 96. The female shipbuilder cast aside after the war Shipbuilding hall named after 'pioneering' female engineer
