LSE:BA.

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Outstanding track record established dividend payer.


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


Market Performance


7 Day Return

-4.2%

BA.

-3.1%

GB Aerospace & Defense

0.2%

GB Market


1 Year Return

-0.6%

BA.

7.0%

GB Aerospace & Defense

1.7%

GB Market

Return vs Industry: BA. underperformed the UK Aerospace & Defense industry which returned 7% over the past year.

Return vs Market: BA. underperformed the UK Market which returned 1.7% over the past year.


Shareholder returns

BA.IndustryMarket
7 Day-4.2%-3.1%0.2%
30 Day-6.4%-5.5%-1.7%
90 Day0.8%5.2%-3.1%
1 Year3.8%-0.6%10.7%7.0%6.7%1.7%
3 Year11.3%-0.9%20.6%8.0%17.7%3.1%
5 Year47.5%20.9%34.2%7.0%36.1%5.5%

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?

47.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BA. (£5.35) is trading below our estimate of fair value (£10.26)

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 (12.9x) compared to the Aerospace & Defense industry average (22.6x).

PE vs Market: BA. is good value based on its PE Ratio (12.9x) compared to the UK market (16.6x).


Price to Earnings Growth Ratio

PEG Ratio: BA. is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: BA. is overvalued based on its PB Ratio (3.1x) compared to the GB Aerospace & Defense industry average (2.2x).


Next Steps

Future Growth

How is BAE Systems forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

5.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BA.'s forecast earnings growth (5.5% per year) is above the savings rate (1.2%).

Earnings vs Market: BA.'s earnings (5.5% per year) are forecast to grow slower than the UK market (12.4% per year).

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

Revenue vs Market: BA.'s revenue (4.5% per year) is forecast to grow faster than the UK market (3.9% per year).

High Growth Revenue: BA.'s revenue (4.5% 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 low in 3 years time (19.1%).


Next Steps

Past Performance

How has BAE Systems performed over the past 5 years?

12.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: BA.'s earnings have grown by 12.7% per year over the past 5 years.

Accelerating Growth: BA.'s earnings growth over the past year (81.6%) exceeds its 5-year average (12.7% per year).

Earnings vs Industry: BA. earnings growth over the past year (81.6%) exceeded the Aerospace & Defense industry -23.4%.


Return on Equity

High ROE: BA.'s Return on Equity (24.8%) is considered high.


Return on Assets

ROA vs Industry: BA. has a higher Return on Assets than the Aerospace & Defense industry average last year.


Return on Capital Employed

ROCE Improving: BA. has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is BAE Systems's financial position?


Financial Position Analysis

Short Term Liabilities: BA.'s short term assets (£8.7B) exceeds its short term liabilities (£8.3B)

Long Term Liabilities: BA.'s short term assets (8.7B) do not cover its long term liabilities (11.5B)


Debt to Equity History and Analysis

Debt Level: BA.'s debt to equity ratio (63.8%) is considered high

Reducing Debt: BA.'s debt to equity ratio has reduced from 92.8% to 63.8% over the past 5 years.

Debt Coverage: BA.'s debt is well covered by operating cash flow (38.8%).

Interest Coverage: BA.'s interest payments on its debt are well covered by EBIT (7.1x coverage).


Balance Sheet

Inventory Level: BA. has a low level of unsold assets or inventory.

Debt Coverage by Assets: BA.'s debt is covered by short term assets (assets are 2.484370x debt).


Next Steps

Dividend

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

4.15%

Current Dividend Yield


Dividend Yield vs Market

company4.1%marketbottom25%2.0%markettop25%5.4%industryaverage3.2%forecastin3Years4.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: BA.'s dividend (4.15%) is higher than the bottom 25% of dividend payers in the UK market (1.99%).

High Dividend: BA.'s dividend (4.15%) is low compared to the top 25% of dividend payers in the UK market (5.37%).

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 (54.4%), 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 (48.3% payout ratio).


Next Steps

Management

What is the CEO of BAE Systems's salary, the management and board of directors tenure and is there insider trading?

2.0yrs

Average management tenure


CEO

Charles Woodburn (47yo)

2.3yrs

Tenure

UK£2,416,000

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 has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the UK market.

Compensation vs Earnings: Charles's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.0yrs

Average Tenure

59yo

Average Age

Experienced Management: BA.'s management team is considered experienced (2 years average tenure).


Board Age and Tenure

6.6yrs

Average Tenure

62.5yo

Average Age

Experienced Board: BA.'s board of directors are considered experienced (6.6 years average tenure).


Insider Trading

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


Ownership Breakdown


Management Team

  • Jerry DeMuro (63yo)

    Executive Director & CEO of BAE Systems

    • Tenure: 5.7yrs
    • Compensation: UK£3.20m
  • Philip Bramwell (62yo)

    Group General Counsel

    • Tenure: 12.8yrs
  • Nigel Whitehead (56yo)

    Chief Technology Officer

    • Tenure: 1.8yrs
  • Rolf Rue

    Regional Managing Director of New Strategic Markets

    • Tenure: 0yrs
  • Peter Lynas

    Group Finance Director & Executive Director

    • Tenure: 8.5yrs
    • Compensation: UK£1.93m
  • Neils Petersen

    Chief of Staff and Executive Vice President of Marketing Operations

    • Tenure: 0yrs
  • Charles Woodburn (47yo)

    Group CEO & Executive Director

    • Tenure: 2.3yrs
    • Compensation: UK£2.42m
  • Karin Hoeing

    Group Human Resources Director

    • Tenure: 1.7yrs
  • Martin Cooper

    Investor Relations Director

    • Tenure: 0yrs
  • Mark Phillips

    Group Communications Director

    • Tenure: 0.8yrs

Board Members

  • Paula G. Reynolds (62yo)

    Independent Non-Executive Director

    • Tenure: 8.5yrs
    • Compensation: UK£141.00k
  • Jerry DeMuro (63yo)

    Executive Director & CEO of BAE Systems

    • Tenure: 5.7yrs
    • Compensation: UK£3.20m
  • Roger Carr (72yo)

    Chairman

    • Tenure: 5.7yrs
    • Compensation: UK£700.00k
  • Earl Cairns

    Chairman of Advisory Board on Tanzania

    • Tenure: 8.3yrs
  • Nick Rose (61yo)

    Senior Independent Director

    • Tenure: 6.8yrs
    • Compensation: UK£140.00k
  • Michael Rouse (71yo)

    Group Marketing Director and Director of BAE Systems Inc

    • Tenure: 0yrs
  • Ian Tyler (59yo)

    Independent Non-Executive Director

    • Tenure: 6.4yrs
    • Compensation: UK£117.00k
  • Peter Lynas

    Group Finance Director & Executive Director

    • Tenure: 8.5yrs
    • Compensation: UK£1.93m
  • Michael Chertoff (65yo)

    Chairman of BAE Systems

    • Tenure: 0yrs
  • Charles Woodburn (47yo)

    Group CEO & Executive Director

    • Tenure: 2.3yrs
    • Compensation: UK£2.42m

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£17.132b
  • Shares outstanding: 3.20b
  • 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
BALBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
BA1 NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJan 1992
BAES.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDNov 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 Analysis2019/10/21 20:39
End of Day Share Price2019/10/21 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.