In key news for UK stocks, shares of the FTSE 100-listed BAE Systems PLC (GB:BA) fell more than 2% despite delivering strong 2023 annual results. The company is optimistic about growing government orders for its defence equipment amid increasing geopolitical tensions. However, investors seem to be concerned about the slowdown in the company’s earnings growth rate. BAE Systems expects its underlying earnings per share (EPS) to grow in the range of 6% to 8% in 2024, compared to the 14% growth last year.
Don't Miss out on Research Tools:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
BA shares have grown by over 100% since the beginning of the Russia-Ukraine war in February 2022.
BAE Systems is a British aerospace and defense company with operations spanning approximately 40 countries worldwide.
2023 Results Snapshot
BAE Systems’ revenue for the year that ended on December 31, 2023, grew by 9% to £23.08 billion compared to the previous year. Its net profit increased to £1.86 billion in 2023 from £1.59 billion last year. The underlying EPS increased by 14% to 63.2p. This growth reflects the enhanced profitability of the company, further benefiting from the ongoing share buyback program.
The primary driving force in 2023 was the company’s order intake, which rose to £37.7 billion from £37.1 billion in the previous year. BAE Systems’ order book increased by 19% to £58 billion as of December 31, 2023.
Following the strong performance, BAE Systems proposed a final dividend of 18.5 per share for 2023, bringing the total to 30.0p. This marked an 11% increase from the 27.0p dividend paid for 2022.
Is BAE Systems a Good Stock to Buy?
According to TipRanks, BA stock has received a Moderate Buy consensus rating based on a total of eight recommendations, of which five are Buy. The BAE Systems share price target is 1,284.12p, which is almost 5% above the current trading levels.
