BAE Systems (LSE:BA) saw its target price raised to 2,325p, from 2,140p as analysts at Deutsche Bank wrote up the London-listed defence engineer.
DB described BAE's first-half performance and an upgraded full-year outlook as strong, but retained a Hold rating for the FTSE 100 share.
Analyst Christophe Menard rolled his valuation forward to 2028 and priced in higher sector multiples across US, European and naval peers, but still sees only around 4% upside from BAE's last close of 2244p, underpinning his decision to stick with Hold rather than upgrade.
The target increase follows a half-year update in which BAE reported constant-currency sales growth of 9%, underlying EBIT up 11% and underlying earnings per share up 13% to 38.9p, prompting management to lift full-year sales growth guidance to 8%-10% from 7%-9% and underlying EBIT growth guidance to 10%-12%; order intake of £16.4bn pushed the backlog to a record £84bn.
Menard flagged incremental order intake in the second half, and a free cash flow profile that departs from the "conservative" three-year guidance management has communicated as the catalysts needed to unlock further value in the stock.
