BAE Systems plc

BATS-CHIXE:BAL Stock Report

Market Cap: UK£39.7b

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.

Below Fair Value: BAL (£13.21) is trading below our estimate of fair value (£16.1)

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 Ratio21.5x
EarningsUK£1.84b
Market CapUK£39.65b

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 Average20.4x
RR. Rolls-Royce Holdings
19.6x-0.09%UK£45.7b
BAB Babcock International Group
13.7x14.2%UK£2.6b
QQ. QinetiQ Group
17.3x13.9%UK£2.4b
CHG Chemring Group
31.2x22.2%UK£970.6m
BAL BAE Systems
21.5x7.7%UK£39.7b

Price-To-Earnings vs Peers: BAL is expensive based on its Price-To-Earnings Ratio (21.5x) compared to the peer average (20.4x).

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 Companies10PE020406080100+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: BAL is good value based on its Price-To-Earnings Ratio (21.5x) compared to the European Aerospace & Defense industry average (23.4x).

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 Ratio21.5x
Fair PE Ratio25x

Price-To-Earnings vs Fair Ratio: BAL is good value based on its Price-To-Earnings Ratio (21.5x) compared to the estimated Fair Price-To-Earnings Ratio (25x).

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£13.21
UK£14.59
+10.5%
7.8%UK£16.30UK£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£10.70n/a19
Jan ’25UK£11.13
UK£11.85
+6.6%
6.0%UK£13.00UK£10.60n/a19
Dec ’24UK£10.58
UK£11.77
+11.3%
5.5%UK£13.00UK£10.60n/a19
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
Jan ’24UK£8.59
UK£9.22
+7.3%
11.0%UK£11.00UK£7.00UK£11.1314
Dec ’23UK£8.16
UK£9.22
+13.0%
11.0%UK£11.00UK£7.00UK£10.5814
Nov ’23UK£8.18
UK£9.02
+10.3%
9.4%UK£10.20UK£7.00UK£11.1814

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

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