Time is running out on BAE Systems (LON:BA) to confirm a deal to sell Typhoon fighters to Qatar, the Telegraph reports. The £5-billion contract for 24 jets was unveiled in December last year.
BAE Systems’ share price has been steady in today’s session, having inched 0.19 percent higher to 627.20p as of 13:47 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index having fallen into the red and currently standing 0.23 percent lower at 7,287.59 points. The group’s shares have added more than five percent to their value over the past year, as compared with about a one-percent gain in the Footsie.
Qatar deal still to be confirmed
The Telegraph reported yesterday that the final terms of the Qatar deal had yet to be confirmed, with the sale having already been pushed back once. BAE Systems had originally said that the sale was “subject to financing conditions and receipt of first payment, expected no later than mid-2018”.
Industry sources told the newspaper that negotiations were continuing in earnest and that BAE Systems was understood to be hopeful of an announcement soon. The Telegraph further reports that according to a leaked Treasury document, UK Export Finance, which had been asked to underwrite the deal, had initially advised against financing it. The credit-guarantee agency had said that although the risk of Qatar defaulting was “very low, if it were to happen it would require several billions of Exchequer funding”.
Analysts on British defence giant
Morgan Stanley, which is ‘overweight’ on BAE Systems, lifted its price target on the shares from 550p to 750p last month. According to MarketBeat, the company currently has a consensus ‘buy’ rating and an average price target of 688.64p.