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BAE Systems (LSE:BA.)

GB0002634946

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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BAE Systems stock research in summary

baesystems.com


ANALYSIS: With an Obermatt Combined Rank of 10 (worse than 90% compared with investment alternatives), BAE Systems (Aerospace & Defense, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of BAE Systems are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives), and are riskily financed (Safety Rank of 18, which means above-average debt burdens) but show above-average growth (Growth Rank of 58). ...read more


RECOMMENDATION: A Combined Rank of 10, is a sell recommendation based on BAE Systems's financial characteristics. As the company BAE Systems shows low value with an Obermatt Value Rank of 19 (81% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 58% of comparable companies (Obermatt Growth Rank is 58). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 18 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for BAE Systems, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more


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Country United Kingdom
Industry Aerospace & Defense
Index FTSE All Shares, FTSE 100, FTSE 350, Diversity Europe
Size class XX-Large

This stock has achievements: Insight 2015-07-17, Top 10 Stock.

14-Mar-2024. Stock data may be delayed. Log in or sign up to get the most recent research.




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Research History: BAE Systems

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
SENTIMENT
SENTIMENT
360° VIEW
360° VIEW

Most recent update of the stock research: 14-Mar-2024. Financial reporting date used for calculating ranks: 30-Jun-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better BAE Systems is in the corresponding investment strategy.
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Combined financial peformance in Detail

ANALYSIS: With an Obermatt Combined Rank of 10 (worse than 90% compared with investment alternatives), BAE Systems (Aerospace & Defense, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of BAE Systems are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives), and are riskily financed (Safety Rank of 18, which means above-average debt burdens) but show above-average growth (Growth Rank of 58). ...read more

RECOMMENDATION: A Combined Rank of 10, is a sell recommendation based on BAE Systems's financial characteristics. As the company BAE Systems shows low value with an Obermatt Value Rank of 19 (81% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 58% of comparable companies (Obermatt Growth Rank is 58). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 18 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for BAE Systems, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
COMBINED
COMBINED

Last update of combined financial performance: 14-Mar-2024. Stock analysis on combined financial performance: The higher the rank of BAE Systems the better the performance.


Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 19 (worse than 81% compared with alternatives), BAE Systems shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for BAE Systems. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 61% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 25 which means that the stock price compared with what market professionals expect for future profits is higher than 75% of comparable companies, indicating a low value concerning BAE Systems's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 26 which means that the stock price compared with what market professionals expect for future profit levels is higher than 74% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 12 is also low. Compared with invested capital, the stock price is higher than for 88% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 19, is a sell recommendation based on BAE Systems's stock price compared with the company's operational size and dividend yields. Should dividend investors pick BAE Systems? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose BAE Systems only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more


VALUE METRICS 2021 2022 2023 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)
DIVIDEND YIELD
DIVIDEND YIELD
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE

Last update of Value Rank: 14-Mar-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of BAE Systems; except for dividend yield where the rank is higher, the higher the yield.


Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 58 (better than 58% compared with alternatives), BAE Systems shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for BAE Systems. Sales Growth has a rank of 62 which means that currently, professionals expect the company to grow more than 62% of its competitors. Capital Growth is also above 42% of competitors with a rank of 60, and Stock Returns with the rank of 73 is also an outperformance. Only Profit Growth is low with a rank of 42 which means that currently, professionals expect the company to grow its profits less than 58% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 58, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, BAE Systems is a good growth stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS 2021 2022 2023 2024
REVENUE GROWTH
REVENUE GROWTH
PROFIT GROWTH
PROFIT GROWTH
CAPITAL GROWTH
CAPITAL GROWTH
STOCK RETURNS
STOCK RETURNS
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH

Last update of Growth Rank: 14-Mar-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of BAE Systems.


Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 18 (better than 18% compared with alternatives), the company BAE Systems has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of BAE Systems is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for BAE Systems and the other two below average. Leverage is at a rank of 50 meaning the company has a below-average debt-to-equity ratio. It has less debt than 50% of its competitors.Refinancing is at a rank of 20, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 80% of its competitors. Liquidity is at a rank of 36, meaning that the company generates less profit to service its debt than 64% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 18 (worse than 82% compared with alternatives), BAE Systems has a financing structure that is significantly riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of BAE Systems are on the safer side. Investors may have a short-term debt challenge and liquidity issues with BAE Systems and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS 2021 2022 2023 2024
LEVERAGE
LEVERAGE
REFINANCING
REFINANCING
LIQUIDITY
LIQUIDITY
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY

Last update of Safety Rank: 14-Mar-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of BAE Systems and the more cash is available to service its debt.


Sentiment Metrics in Detail

SENTIMENT 2021 2022 2023 2024
ANALYST OPINIONS
ANALYST OPINIONS
OPINIONS CHANGE
OPINIONS CHANGE
PRO HOLDINGS
PRO HOLDINGS
MARKET PULSE
MARKET PULSE
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT

Last update of Sentiment Rank: 14-Mar-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for BAE Systems.
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Stock analysis by the purely fact based Obermatt Method for BAE Systems from March 14, 2024.

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