LSE:BA.

Stock Analysis Report

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Executive Summary

BAE Systems plc provides defense, aerospace, and security solutions worldwide. More Details


Snowflake Analysis

Established dividend payer and good value.


Similar Companies

Share Price & News

How has BAE Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BA. is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: BA.'s weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

-3.3%

BA.

-2.2%

GB Aerospace & Defense

-0.2%

GB Market


1 Year Return

-7.1%

BA.

-8.1%

GB Aerospace & Defense

-6.8%

GB Market

Return vs Industry: BA. exceeded the UK Aerospace & Defense industry which returned -12.2% over the past year.

Return vs Market: BA. exceeded the UK Market which returned -10.7% over the past year.


Shareholder returns

BA.IndustryMarket
7 Day-3.3%-2.2%-0.2%
30 Day28.3%27.6%14.7%
90 Day-0.9%5.1%7.6%
1 Year-2.7%-7.1%-5.0%-8.1%-3.1%-6.8%
3 Year5.1%-7.6%10.9%-0.5%2.6%-9.9%
5 Year24.3%1.4%27.8%6.8%31.1%1.5%

Long-Term Price Volatility Vs. Market

How volatile is BAE Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is BAE Systems undervalued compared to its fair value and its price relative to the market?

39.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BA. (£5.09) is trading below our estimate of fair value (£8.43)

Significantly Below Fair Value: BA. is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: BA. is good value based on its PE Ratio (13.4x) compared to the GB Aerospace & Defense industry average (20.8x).

PE vs Market: BA. is good value based on its PE Ratio (13.4x) compared to the UK market (21.1x).


Price to Earnings Growth Ratio

PEG Ratio: BA. is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: BA. is overvalued based on its PB Ratio (3.6x) compared to the GB Aerospace & Defense industry average (2x).


Next Steps

Future Growth

How is BAE Systems forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

9.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BA.'s forecast earnings growth (9.6% per year) is above the savings rate (1.2%).

Earnings vs Market: BA.'s earnings (9.6% per year) are forecast to grow slower than the UK market (27.1% per year).

High Growth Earnings: BA.'s earnings are forecast to grow, but not significantly.

Revenue vs Market: BA.'s revenue (4% per year) is forecast to grow slower than the UK market (6.8% per year).

High Growth Revenue: BA.'s revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BA.'s Return on Equity is forecast to be high in 3 years time (24.1%)


Next Steps

Past Performance

How has BAE Systems performed over the past 5 years?

10.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BA. has high quality earnings.

Growing Profit Margin: BA.'s current net profit margins (6.4%) are lower than last year (7.6%).


Past Earnings Growth Analysis

Earnings Trend: BA.'s earnings have grown by 10.4% per year over the past 5 years.

Accelerating Growth: BA.'s has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: BA. had negative earnings growth (-8.4%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (-6%).


Return on Equity

High ROE: Whilst BA.'s Return on Equity (27.12%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is BAE Systems's financial position?


Financial Position Analysis

Short Term Liabilities: BA.'s short term assets (£9.6B) exceed its short term liabilities (£9.0B).

Long Term Liabilities: BA.'s short term assets (£9.6B) do not cover its long term liabilities (£13.7B).


Debt to Equity History and Analysis

Debt Level: BA.'s debt to equity ratio (101.7%) is considered high.

Reducing Debt: BA.'s debt to equity ratio has reduced from 155% to 101.7% over the past 5 years.

Debt Coverage: BA.'s debt is well covered by operating cash flow (23.1%).

Interest Coverage: BA.'s interest payments on its debt are well covered by EBIT (7.9x coverage).


Balance Sheet


Next Steps

Dividend

What is BAE Systems's current dividend yield, its reliability and sustainability?

4.56%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: BA.'s dividend (4.56%) is higher than the bottom 25% of dividend payers in the UK market (1.69%).

High Dividend: BA.'s dividend (4.56%) is low compared to the top 25% of dividend payers in the UK market (4.96%).


Stability and Growth of Payments

Stable Dividend: BA.'s dividends per share have been stable in the past 10 years.

Growing Dividend: BA.'s dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (61%), BA.'s dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BA.'s dividends in 3 years are forecast to be well covered by earnings (49.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Charles Woodburn (48 yo)

3.33yrs

Tenure

UK£3,934,000

Compensation

Dr. Charles Woodburn has been the Group Chief Executive of BAE Systems plc since July 1, 2017 and as its Executive Director since May 9, 2016. Dr. Woodburn served as the Chief Operating Officer of BAE Syst...


CEO Compensation Analysis

Compensation vs Market: Charles's total compensation ($USD5.25M) is about average for companies of similar size in the UK market ($USD4.56M).

Compensation vs Earnings: Charles's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Charles Woodburn
Group CEO & Executive Director3.33yrsUK£3.93m0.0067%
£ 1.1m
Bradley Greve
Group Finance Director & Executive Director0.58yrno data0.000010%
£ 1.6k
Ben Hudson
Chief Technology Officer0.83yrno datano data
Martin Cooper
Investor Relations Directorno datano datano data
Philip Bramwell
Group General Counsel9.42yrsno datano data
Mark Phillips
Group Communications Director1.42yrsno datano data
Neils Petersen
Chief of Staff and Executive Vice President of Marketing Operationsno datano datano data
Karin Hoeing
Group Human Resources Director2.75yrsno datano data
Rolf Rue
Regional Managing Director of New Strategic Marketsno datano datano data
Steve Meighan
Regional Managing Director of Asia Pacificno datano datano data
Tom Arseneault
Executive Director0.58yrno data0.0020%
£ 317.6k
Bob Keen
Regional Managing Director of Europeno datano datano data

1.8yrs

Average Tenure

55yo

Average Age

Experienced Management: BA.'s management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Charles Woodburn
Group CEO & Executive Director3.33yrsUK£3.93m0.0067%
£ 1.1m
Bradley Greve
Group Finance Director & Executive Director0.58yrno data0.000010%
£ 1.6k
Philip Bramwell
Group General Counsel9.42yrsno datano data
Tom Arseneault
Executive Director0.58yrno data0.0020%
£ 317.6k
Michael Rouse
Group Marketing Director and Director of BAE Systems Incno datano datano data
Paula G. Reynolds
Independent Non-Executive Director9.58yrsUK£140.00k0.00078%
£ 126.4k
Roger Carr
Chairman6.75yrsUK£700.00k0.0052%
£ 839.4k
Earl Cairns
Chairman of Advisory Board on Tanzania9.42yrsno datano data
Nicholas Rose
Independent Director10.75yrsUK£135.00k0.0017%
£ 277.1k
Christopher Grigg
Senior Independent Non-Executive Director0.58yrUK£87.00k0.00076%
£ 123.2k
Stephen Pearce
Independent Non-Executive Director1.42yrsUK£52.00kno data
Michael Chertoff
Chairman of BAE Systemsno datano datano data

5.6yrs

Average Tenure

62yo

Average Age

Experienced Board: BA.'s board of directors are considered experienced (5.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

BAE Systems plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: BAE Systems plc
  • Ticker: BA.
  • Exchange: LSE
  • Founded: 1979
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: UK£16.205b
  • Shares outstanding: 3.22b
  • Website: https://www.baesystems.com

Number of Employees


Location

  • BAE Systems plc
  • 6 Carlton Gardens
  • London
  • Greater London
  • SW1Y 5AD
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BAES.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
BA.LSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
BSPDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
BSPXTRA (XETRA Trading Platform)YesOrdinary SharesDEEURJan 1992
BALBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
BA1 NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJan 1992
BAES.YOTCPK (Pink Sheets LLC)SPON ADR EA REP 4 ORD GBP.0.025(MGN JP)USUSDNov 1998
BSPADB (Deutsche Boerse AG)SPON ADR EA REP 4 ORD GBP.0.025(MGN JP)DEEURNov 1998

Biography

BAE Systems plc provides defense, aerospace, and security solutions worldwide. The company operates through five segments: Electronic Systems, Cyber & Intelligence, Platforms & Services (US), Air, and Mari...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/01 19:06
End of Day Share Price2020/12/01 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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 here.