BAE Systems share price: Group wins US Army funding for new vehicles

BAE Systems (LON:BA) has won additional funding of up to $575 million from the US Army for new armoured vehicles, Reuters has reported. The news comes as the British defence giant prepares to update investors on its full-year performance tomorrow.

BAE Systems’ share price has fallen deep into the red in today’s session, having given up 0.92 percent to 506.91p as of 14:51 GMT. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory currently standing 0.56 percent higher at 7,219.58 points. The group’s shares have given up more than 15 percent of their value over the past year, as compared with about a 0.4-percent fall in the Footsie.

BAE Systems wins funding

Reuters reported yesterday that BAE Systems had said that it had secured additional funding up to $575 million from the US Army to begin production of its new armoured vehicles that would replace the Vietnam War-era M113 fleet of personnel carriers. The company explained that the new vehicles, called the Armoured Multi-Purpose Vehicle (AMPV), are ‘more survivable’ with all-terrain mobility capabilities. Total funding for the initial production of the new vehicles stands at $873 million.

“(The fresh award) brings soldiers one step closer to deploying this critical capability for completing their missions and coming home safely,” Bill Sheehy, AMPV programme director for BAE Systems’ combat vehicles business, commented, as quoted by the newswire.

Analysts on FTSE 100 group

Societe Generale, which rates BAE Systems as a ‘buy,’ lowered its price target on the shares from 620p to 585p last month. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 628.25p.

As of 15:11 GMT, Wednesday, 20 February, BAE Systems plc share price is 506.91p.