Analysts have cut Saab’s price target to SEK466.70, citing concerns around limited growth prospects due to its small scale, a stretched valuation with limited further upside, and skepticism that increased defense spending will sufficiently boost incremental demand.
Analyst Commentary
- Bearish analysts highlight Saab’s small scale as a downside risk impacting future growth prospects.
- Concerns over the stock’s “stretched” or elevated valuation, with limited upside given current pricing.
- Current share price already factors in optimistic assumptions of increased defense spending.
- Skepticism that potential NATO defense spending targets—even with increased allocations—will drive enough incremental demand to justify Saab’s growth expectations.
- Market is viewed as pricing in more growth than realistically probable, even allowing for possible market share gains.
What's in the News
- Saab secured multiple major defense contracts, including a SEK 5.3 billion order for Gripen E/F fighter jets for Thailand, SEK 1.8 billion for mobile air defense (MSHORAD) systems for the Czech Republic, SEK 1.5 billion for RBS 70 NG air defense solutions for Sweden, SEK 900 million for 22 combat boats for Sweden, and SEK 550 million for Giraffe 4A radar systems for a Latin American customer (Key Developments).
- Saab announced the development of the Nimbrix Counter-Unmanned Aerial System (C-UAS) missile, a cost-effective ground-based system designed to counter small drone threats, with initial deliveries planned for 2026 and a showcase scheduled at DSEI 2025 in London (Key Developments).
- The company is collaborating on next-generation defense and technology initiatives: launching Sferical AI, a sovereign AI supercomputer project with leading Swedish firms and NVIDIA, and introducing TactiGate XD, a next-gen cross-domain cyber solution with Clavister for secure military communications (Key Developments).
- Saab is engaged in high-level defense cooperation, signing an MoU with Poland’s PGZ Group to work on multi-domain defense projects, potential joint initiatives for Ukrainian support, and Polish Armed Forces modernization (Key Developments).
- Boeing, Saab, and BAE Systems are in talks to potentially replace Britain’s Hawk trainer aircraft, suggesting Saab’s involvement in a prominent UK defense procurement discussion (Reuters).
Valuation Changes
Summary of Valuation Changes for Saab
- The Consensus Analyst Price Target has fallen from SEK504.57 to SEK466.70.
- The Net Profit Margin for Saab has fallen slightly from 8.77% to 8.37%.
- The Consensus Revenue Growth forecasts for Saab has fallen slightly from 17.1% per annum to 16.4% per annum.
Disclaimer
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