BAE Systems (LON:BA) has officially submitted a bid to build new warships for Australia, The Telegraph has revealed. The move comes with Canberra launching one of the Western world’s largest fleet renewal programmes.
BAE Systems’ share price has advanced in today’s session, outperforming the broader London market, amid ongoing tension between the US and North Korea. As of 13:32 BST, the defence giant’s shares were changing hands 0.52 percent higher at 585.50p, as compared with a 1.14-percent dip in the benchmark FTSE 100 index. BAE’s stock, however, is down nearly one percent in the year-to-date.
The Telegraph reported today that BAE Systems had proposed a partnership with the Canberra government to build nine anti-submarine warships for Australia’s navy under the country’s SEA 5000 Future Frigate programme. The design submitted for the new contract is based on the Type 26 frigate which the British defence giant started building last month at its Glasgow shipyards, with the first ship expected to enter service with the Royal Navy in the mid-2020s.
“Our commitment is to establish a world-class shipbuilding capability in Australia that will build Australian ships with an Australian workforce,” the group’s global maritime business development director Nigel Stewart said, as quoted by the newspaper. BAE already has 3,500 staff working Down Under, and the company has built and supported ships for the Australian navy for more than 30 years.
The 18 analysts offering 12-month price targets for BAE Systems for the Financial Times have a median target of 667.50p on the shares, with a high estimate of 800.00p and a low estimate of 460.00p. As of August 4, the consensus forecast amongst 20 polled investment analysts covering the blue-chip defence giant has it that the company will outperform the market.