BAE Systems plc

BATS-CHIXE:BAL Stock Report

Market Cap: UK£40.1b

BAE Systems Valuation

Is BAL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of BAL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Discounted Cash Flow
Simply Wall St
UK£15.84
Fair Value
15.9% undervalued intrinsic discount
16
Number of Analysts

Below Fair Value: BAL (£13.39) is trading below our estimate of fair value (£15.93)

Significantly Below Fair Value: BAL is trading below fair value, but not by a significant amount.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BAL?

Key metric: As BAL is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for BAL. This is calculated by dividing BAL's market cap by their current earnings.
What is BAL's PE Ratio?
PE Ratio21.8x
EarningsUK£0
Market CapUK£40.08b

Price to Earnings Ratio vs Peers

How does BAL's PE Ratio compare to its peers?

The above table shows the PE ratio for BAL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average19.9x
RR. Rolls-Royce Holdings
23.3x2.7%UK£54.5b
BAB Babcock International Group
17x15.1%UK£3.3b
QQ. QinetiQ Group
16.1x18.5%UK£2.2b
CHG Chemring Group
23.3x18.1%UK£984.6m
BAL BAE Systems
21.6x8.3%UK£39.8b

Price-To-Earnings vs Peers: BAL is expensive based on its Price-To-Earnings Ratio (21.6x) compared to the peer average (19.9x).

Price to Earnings Ratio vs Industry

How does BAL's PE Ratio compare vs other companies in the European Aerospace & Defense Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
No. of Companies10PE01632486480+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: BAL is good value based on its Price-To-Earnings Ratio (21.6x) compared to the European Aerospace & Defense industry average (23.7x).

Price to Earnings Ratio vs Fair Ratio

What is BAL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BAL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio21.8x
Fair PE Ratio23.6x

Price-To-Earnings vs Fair Ratio: BAL is good value based on its Price-To-Earnings Ratio (21.6x) compared to the estimated Fair Price-To-Earnings Ratio (24.2x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst BAL forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£13.33
UK£14.73
+10.6%
8.7%UK£16.85UK£12.40n/a17
Feb ’26UK£12.26
UK£14.71
+20.0%
8.5%UK£16.70UK£12.40n/a16
Jan ’26UK£11.48
UK£14.57
+27.0%
8.8%UK£16.70UK£11.80n/a17
Dec ’25UK£12.22
UK£14.61
+19.6%
8.9%UK£16.70UK£11.80n/a17
Nov ’25UK£12.67
UK£14.45
+14.0%
7.0%UK£16.00UK£11.80n/a17
Oct ’25UK£12.79
UK£14.43
+12.8%
7.1%UK£16.00UK£11.80n/a17
Sep ’25UK£13.65
UK£14.41
+5.6%
6.8%UK£16.00UK£11.80n/a18
Aug ’25UK£12.84
UK£14.34
+11.7%
6.7%UK£16.00UK£11.80n/a18
Jul ’25UK£12.77
UK£14.16
+10.9%
7.4%UK£16.00UK£11.80n/a18
Jun ’25UK£13.94
UK£14.00
+0.4%
6.6%UK£15.50UK£11.80n/a18
May ’25UK£13.37
UK£13.61
+1.8%
6.8%UK£15.00UK£11.80n/a18
Apr ’25UK£13.52
UK£13.38
-1.0%
7.1%UK£14.50UK£11.80n/a18
Mar ’25UK£12.51
UK£12.98
+3.8%
7.1%UK£14.50UK£11.80n/a19
Feb ’25UK£11.70
UK£12.16
+4.0%
5.9%UK£13.50UK£10.70UK£12.2619
Jan ’25UK£11.13
UK£11.85
+6.6%
6.0%UK£13.00UK£10.60UK£11.4819
Dec ’24UK£10.58
UK£11.77
+11.3%
5.5%UK£13.00UK£10.60UK£12.2219
Nov ’24UK£11.18
UK£11.52
+3.0%
5.1%UK£12.51UK£10.20UK£12.6719
Oct ’24UK£10.01
UK£11.42
+14.2%
5.3%UK£12.51UK£10.20UK£12.7919
Sep ’24UK£10.09
UK£11.35
+12.4%
6.7%UK£12.51UK£9.09UK£13.6519
Aug ’24UK£9.34
UK£10.71
+14.6%
11.1%UK£12.08UK£7.00UK£12.8419
Jul ’24UK£9.28
UK£10.62
+14.4%
10.9%UK£12.08UK£7.00UK£12.7719
Jun ’24UK£9.41
UK£10.34
+9.9%
11.2%UK£11.75UK£7.00UK£13.9418
May ’24UK£10.11
UK£10.25
+1.4%
10.7%UK£11.55UK£7.00UK£13.3717
Apr ’24UK£9.85
UK£10.21
+3.6%
10.4%UK£11.50UK£7.00UK£13.5217
Mar ’24UK£9.06
UK£10.11
+11.5%
10.2%UK£11.46UK£7.00UK£12.5117
Feb ’24UK£8.55
UK£9.59
+12.1%
10.0%UK£11.00UK£7.00UK£11.7015
Analyst Price Target
Consensus Narrative from 16 Analysts
UK£14.59
Fair Value
8.7% undervalued intrinsic discount
16
Number of Analysts

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2025/02/19 21:42
End of Day Share Price 2025/02/19 00:00
Earnings2024/12/31
Annual Earnings2024/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

BAE Systems plc is covered by 51 analysts. 14 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Pierre-Yves GauthierAlphaValue
Guy BrownArden Partners Plc.
Joseph CampbellBarclays