BAE Systems share price outlook ahead of earnings?

on Nov 14, 2022
  • BAE share price has pulled back by 13% from its YTD high.
  • The company will publish its financial results on Tuesday.
  • Analysts expect that its business growth was modest.

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BAE Systems (LON: BA) share price has been a major winner in the FTSE 100 index this year. It has jumped by over 36%, making it the second-best performer in the index after Shell. Recently, however, the stock has dropped by about 13% below its highest point in October.

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BAE Systems earnings preview

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BAE Systems is the biggest defence contractor and manufacturer in Europe. The firm manufactures products used in all areas of the industry. It has products for air, land, and sea. In the past few years, the company has also launched cybersecurity, electric buses, and  electronics business among others.

BAE Systems serves customers in most western countries. Its key countries are the United States, UK, Australia, and Saudi Arabia. Most of its total revenue comes from the United States, where it has over 31k customers.

Therefore, with the crisis in Ukraine ongoing, the number of countries seeking to boost their defence capabilities has increased substantially. Countries like the United States, UK, Germany, and Australia have said that they will boost their spending.

The next key catalyst for the BAE Systems share price will be its earnings that are scheduled for Tuesday. Analysts at Barclays believe that the company’s revenue for 2022 will come in at 23 billion pounds. They expect that the underlying earnings per share (EPS) will be 53.7p.

In its most recent results, the company said that its total sales in the six months to June rose modestly to £10.58 billion from the previous £10 billion. Its underlying EBIT rose from £1.02 billion to £1.1 billion. On the other hand, its free cash flow narrowed from £461 million to £123 million. 

For the year, the company expects that its total sales will rise by between 2% and 4% while cumulative free cash flow will be over £1 billion.

BAE Systems share price forecast

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bae systems share price

The daily chart shows that the BAE share price has been in a bullish trend in the past few weeks. As it rose, the shares made an ascending channel shown in black. Recently, however, the stock has dropped below the lower side of the channel.

The stock has also crashed below the 25-day and 50-day moving averages, which is a bearish view. The stochastic oscillator has moved below the oversold level. Therefore, the stock will likely continue falling as sellers target the key support level at 650p.


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