Advertisement
U.S. markets closed
  • S&P Futures

    5,208.00
    -6.75 (-0.13%)
     
  • Dow Futures

    39,200.00
    -23.00 (-0.06%)
     
  • Nasdaq Futures

    18,187.75
    -43.75 (-0.24%)
     
  • Russell 2000 Futures

    2,047.70
    -2.10 (-0.10%)
     
  • Crude Oil

    82.56
    -0.16 (-0.19%)
     
  • Gold

    2,164.70
    +0.40 (+0.02%)
     
  • Silver

    25.32
    +0.06 (+0.22%)
     
  • EUR/USD

    1.0877
    0.0000 (-0.00%)
     
  • 10-Yr Bond

    4.3400
    +0.0360 (+0.84%)
     
  • Vix

    14.33
    -0.08 (-0.56%)
     
  • GBP/USD

    1.2725
    -0.0004 (-0.03%)
     
  • USD/JPY

    149.3310
    +0.2330 (+0.16%)
     
  • Bitcoin USD

    65,830.81
    -2,087.38 (-3.07%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,722.55
    -4.87 (-0.06%)
     
  • Nikkei 225

    39,596.29
    -144.15 (-0.36%)
     

Should You Buy BAE Systems plc (LON:BA.) At £6.344?

BAE Systems plc (LSE:BA.) saw a decent share price growth in the teens level on the LSE over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at BAE Systems’s outlook and value based on the most recent financial data to see if the opportunity still exists. Check out our latest analysis for BAE Systems

Is BAE Systems still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 18.33% below my intrinsic value, which means if you buy BAE Systems today, you’d be paying a fair price for it. And if you believe the company’s true value is £7.77, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, BAE Systems’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

What does the future of BAE Systems look like?

LSE:BA. Future Profit May 14th 18
LSE:BA. Future Profit May 14th 18

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. BAE Systems’s earnings over the next few years are expected to increase by 51.96%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in BA.’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on BA., now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on BAE Systems. You can find everything you need to know about BAE Systems in the latest infographic research report. If you are no longer interested in BAE Systems, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.

Advertisement