BAE Systems share price outperforms as Credit Suisse hikes valuation

on Feb 24, 2017
Updated: Oct 21, 2019

Shares in BAE Systems (LON:BA) have been steady in today’s session, outperforming the broader London market, as analysts at Credit Suisse hiked their valuation on the shares. The move came after the defence contractor updated investors on its full-year performance yesterday, posting a rise in profits and revenues, and forecasting earnings growth this year.

As of 14:39 GMT, BAE Systems’ share price had added 0.08 percent to 610.00p, outperforming the benchmark FTSE 100 index which has fallen into the red and is currently 0.71 percent worse off at 7,219.58 points. The group’s shares have gained more than 21 percent over the past year, and are up by some three percent in the year-to-date.
Credit Suisse lifted its price target on BAE Systems today from 520.00p to 610.00p, to incorporate the group’s full-year numbers and latest financial guidance. The defence contractor’s 2016 earnings per share were two percent ahead of analyst estimates and at £1.54 billion net debt was below forecasts as the company churned out more cash than anticipated. The FTSE 100 defence contractor further forecast that its underlying earnings per share will come in between five percent and 10 percent higher than 2016’s 40.3p.

Sharecast quoted the Swiss broker as saying that assuming a pound-US dollar exchange rate of 1.25 against 1.30 and lower financial costs, operating income this year would be largely unchanged from Credit Suisse’s prior estimate, but the 2018 figure would be one percent higher and four percent more in both 2019 and 2020.
Barclays, which has an ‘underweight’ rating on BAE Systems, also boosted its price target on the shares today, from 430p to 460p. Societe Generale meanwhile reiterated its ‘buy’ stance on the group, valuing the shares at 690p. According to MarketBeat, BAE Systems currently has a consensus ‘buy’ rating and an average price target of 609.67p.
As of 14:56 GMT, Friday, 24 February, BAE Systems plc share price is 610.00p.

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