Saab (OM:SAAB B) Valuation in Focus After Securing Billions in New Defense Contracts

Saab (OM:SAAB B) has attracted fresh attention after landing several important defense contracts, including a SEK 540 million NATO order for its Arthur radar and additional agreements in both air and naval systems.

See our latest analysis for Saab.

These sizable contract wins have put Saab firmly on the radar for investors, especially given its strong year-to-date share price return of 111.5%. While there has been some recent volatility, the company’s 1-year total shareholder return of 108.6% and 5-year total of 913.1% show that momentum is still firmly with the stock, reflecting sustained confidence in Saab’s growth trajectory despite short-term pullbacks.

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But with such extraordinary share price gains and a flurry of new orders, is Saab now trading at a discount given its outlook, or have markets already taken all the future growth potential for this defense leader into account?

Most Popular Narrative: 4% Overvalued

With Saab shares last closing at SEK492.35 and the most-followed narrative assigning a fair value of SEK473, the market price currently stands just above the consensus fair value. This sets the context for the thinking that underpins today’s pricing.

Heightened adoption of AI, autonomous platforms, and digital warfare technologies is accelerating investment requirements from governments globally. Saab's committed R&D in emerging technologies (for example, AI-enabled Gripen fighters, collaboration with General Atomics on drones, automated manufacturing) should increase its share in high-margin, next-generation contracts, boosting future earnings and improving net margins.

Read the complete narrative.

Want a peek at how aggressive technology bets and high-margin contract projections shape this valuation? Find out which bullish assumptions are embedded and what ambitious future scenario makes this fair value possible.

Result: Fair Value of $473 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Saab’s dependence on government contracts and rising investment demands could introduce new volatility, particularly if defense budgets tighten unexpectedly.

Find out about the key risks to this Saab narrative.

Build Your Own Saab Narrative

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A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Saab.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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