Shares in BAE Systems (LON:BA) have jumped more than one percent in London this morning, as Qatar confirmed a £5-billion Typhoon order. The news marks a boost for the British defence contractor which will build 24 jets and provide support and training by 2022.
As of 08:52 GMT, BAE Systems’ share price had added 0.99 percent to 562.50p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.63 percent higher at 7,440.62 points. The group’s shares have lost more than six percent of their value over the past year, as compared with a near seven-percent rise in the Footsie.
The UK government announced in a statement yesterday that it had agreed a multi-billion pound contract to supply Qatar with 24 Typhoon aircraft. The aircraft will be assembled in the UK by BAE Systems, which confirmed the order in a separate statement, noting that the contract was valued at approximately £5 billion.
The deal is subject to financing conditions and receipt by the company of first payment, which are expected to be fulfilled no later than mid-2018.
“We are delighted to begin a new chapter in the development of a long-term relationship with the State of Qatar and the Qatar Armed Forces, and we look forward to working alongside our customer as they continue to develop their military capability,” Charles Woodburn, BAE Systems Chief Executive, commented in the statement.
Analysts on BAE
The 19 analysts offering 12-month price targets for BAE Systems for the Financial Times have a median target of 655.00p on the shares, with a high estimate of 795.00p and a low estimate of 460.00p. As of December 9, the consensus forecast amongst 21 polled investment analysts covering the blue-chip defence contractor has it that the company will outperform the market.