BAE Systems has received a price target upgrade from JP Morgan, with the US bank rating the shares as very appealing in the current fragile economic environment.
Target is now 1,000p, up 4%, versus the market price of 842.6p, with JPM’s comments sending the weapons maker to the top of the FTSE 100.
The bank has raised its EPS estimates by 4-5% pa through 2023-25E helped by a stronger US$ and lower UK corporation tax.
“We also see potential for further upside if there is an improvement in market conditions in Saudi Arabia and from higher UK defence spending.
“BAE offers defensive growth, a solid balance sheet, and a 2022 forecast dividend yield of 5%,” concluded the bank.