Source: Sharecast
Berenberg said BAE Systems was "one of the best performing European defence stocks" so far this year, with shares areup by 32% since the start of 2026.
The German bank stated BAE's FY25 results "reinforced the narrative" that the company will sustainably grow revenue at "a high single-digit rate" over the medium term, with a higher durability to growth post-2030 than the sector average.
Berenberg also noted that US military action in Iran and risks of an escalating regional conflict had raised the prospect for "a significant increase in US defence spending" in FY27.
"We raise our FY29 EPS estimates by 6% to reflect a higher US defence budget over the medium term, and increase our price target to 2,300p. The shares have re-rated to trade on 17.0x P/E in 2030, a 20% premium to peers, a level we view as a fair reflection of the improved outlook," said Berenberg, which has a 'hold' rating on the stock.
Reporting by Iain Gilbert at Sharecast.com