BAE Systems share price: Norway’s sovereign fund sells out of group

Move comes as fund continues with ethical push

BAE Systems share price: Norway’s sovereign fund sells out of group

BAE Systems (LON:BA) has suffered a blow, with Norway’s sovereign wealth fund pulling out its investment in the British defence contractor. The move comes as the fund continues with its ethical drive.

BAE Systems’ share price rose marginally higher in yesterday’s session, having added 0.24 percent to close at 592.80p. The stock, however, outperformed the broader UK market, with the benchmark FTSE 100 index ending the previous session in negative territory. BAE’s shares nevertheless remain more than three percent down over the past year.

Norway fund ditches BAE

Norges Bank announced in a statement yesterday that it had decided to exclude nine companies, including Britain’s BAE Systems, from the Government Pension Fund Global. The central bank explained that the FTSE 100 group, along with AECOM, Fluor Corp and Huntington Ingalls Industries, were excluded because of their involvement in the production of nuclear weapons. 

The Independent noted in its coverage of the news that the Fund’s Council on Ethics had made its recommendation to drop BAE in March 2016 on the grounds that the UK group’s involvement in systems engineering meant they had a ‘key role in the production or upgrading of the products’.

Analysts on BAE Systems

The 18 analysts offering 12-month price targets for BAE Systems for the Financial Times have a median target of 680.00p, with a high estimate of 798.00p and a low estimate of 460.00p. As of January 13, the consensus forecast amongst 20 polled investment analysts covering the British engine maker has it that the company will outperform the market.

UBS recently hiked its rating on BAE, arguing that the FTSE 100 group’s current valuation was undemanding following the pension agreement and confirmation of the Qatar order.

As of 08:13 GMT, Wednesday, 17 January, BAE Systems plc share price is 594.40p.

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