BAE Systems share price outperforms as Goldman Sachs names group ‘best of British’

on Aug 24, 2017
Updated: Mar 11, 2020

Shares in BAE Systems (LON:BA) have advanced in London in today’s session, outperforming the broader UK market, as Goldman Sachs named the defence contractor one of its ‘best of British’ stocks. The move came after the US bank recently added the FTSE 100 group to its ‘conviction buy’ list.

As of 13:32 BST, BAE Systems’ share price had climbed 2.03 percent to 604.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.50 percent higher at 7,419.32 points. The group’s shares have added more than 13 percent to their value over the past year, and are up by nearly two percent in the year-to-date.

Goldman Sachs named BAE Systems as one of its ‘best of British’ stocks, along with Sage (LON:SGE), Rotork (LON:ROR) and Ocado (LON:OCDO). Sharecast quoted the analysts as explaining that the stock had sharply underperformed the FTSE 100 index in the past two months, and that with 26-percent upside to its price target, a likely upcoming catalyst in the form of a Typhoon contract award from Saudi Arabia, and an unprecedented valuation disconnect versus US peers, the entry point was compelling.

The comments came after Goldman, which rates BAE Systems as a ‘buy’ with a price target of 750p, recently added the stock to its ‘conviction’ list, noting at the time that it expected the new Typhoon order from Saudi Arabia ‘to cement the outlook for 2019/2020,’ as quoted by Proactive Investors.  

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 18, the consensus forecast amongst 20 polled investment analysts covering BAE Systems has it that the company will outperform the market.  

As of 14:01 BST, Thursday, 24 August, BAE Systems plc share price is 603.75p.