BAE Systems PLC

BA.: XLON (GBR)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	GBX 8,891.00	Sfxnh	Hkkqvqkwd

BAE: We Increase Fair Value Estimate From GBX 1,330 to GBX 1,490 on Higher Defense Spending

Loredana Muharremi

May 10, 2024

We are increasing our fair value estimate for wide-moat BAE from GBX 1,330 to GBX 1,490 on the back of higher budgeted defense spending for Europe. Overall, the latest industry estimates show a cumulative increase of over USD 500 billion in European defense for the next decade compared with last year's predictions. Finally, we are incorporating the new growth estimates in our long-term earnings growth rate, increasing it from 3% to 5%.

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