| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 40.10 | 76 |
| Intrinsic value (DCF) | 8.69 | -62 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 15.70 | -31 |
BAE Systems plc (BSP.DE) is a global leader in defense, aerospace, and security solutions, headquartered in Farnborough, UK. Operating across five key segments—Electronic Systems, Cyber & Intelligence, Platforms & Services (US), Air, and Maritime—BAE Systems delivers cutting-edge technologies for military and commercial applications. The company specializes in electronic warfare, navigation systems, cyber security, combat vehicles, aircraft, and naval systems, serving governments and allied forces worldwide. With a strong focus on innovation, BAE Systems plays a critical role in national security and defense modernization. Its diversified portfolio ensures resilience in the volatile aerospace and defense sector, making it a key player in the global defense industry. Listed on the Deutsche Börse (XETRA), BAE Systems is a cornerstone investment in the Industrials sector, combining technological expertise with long-term government contracts.
BAE Systems plc presents a compelling investment case due to its stable revenue streams from long-term defense contracts, strong government relationships, and diversified product portfolio. The company's low beta (0.292) indicates lower volatility compared to the broader market, appealing to risk-averse investors. With a market cap of €64.8 billion and solid financials—including €26.3 billion in revenue and €1.96 billion in net income—BAE Systems demonstrates financial stability. However, high total debt (€10.15 billion) and capital-intensive operations pose risks. The defense sector's reliance on government spending also introduces geopolitical and budgetary uncertainties. Nonetheless, BAE's consistent dividend (€0.39 per share) and strong cash position (€3.38 billion) enhance its attractiveness as a defensive stock in the Industrials sector.
BAE Systems holds a competitive edge through its diversified defense and aerospace portfolio, deep government ties, and technological leadership in electronic warfare and cyber security. Its five-segment structure allows for revenue stability across different defense domains. The company's strong presence in the US and UK markets, coupled with long-term contracts, provides a steady cash flow. However, competition in the global defense sector is intense, with rivals like Lockheed Martin and Northrop Grumman dominating certain niches. BAE's focus on naval systems and electronic warfare differentiates it, but it faces challenges in scaling its cyber and intelligence segment against pure-play tech firms. The company's ability to innovate and secure high-value contracts—such as next-generation fighter jets and naval modernization programs—will be critical in maintaining its market position. Its relatively lower profitability (net margin ~7.4%) compared to some US peers suggests room for operational efficiency improvements.