# BAE Systems plc (BA.L) fundamentals

Data as of 2026-09-08. LSE, United Kingdom. Sector: Industrials / Aerospace & Defense. Price 1953p, market value 57.2 billionp.

## Valuation
- **P/E (trailing): 27.9×** (5-yr avg 1774.7×, 3-yr avg 2054.7×). BAE Systems plc trades at 27.9× trailing earnings, well below its own five-year average of 1774.7×: cheap by its own standards. The Industrials median in the September 2026 study was 25.7×. Forward P/E is 20.4×, lower than trailing, so analysts expect earnings to grow.
- **PEG: 3.26**. A PEG of 3.26 means the P/E is high relative to expected earnings growth; the price already assumes a lot.
- **Price / sales: 1.0×**. Each dollar of revenue is priced at 1.0×.
- **Price / book: 4.7×**. The shares trade at 4.7× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 8.3×**. Enterprise value is 8.3× operating earnings before depreciation, the multiple that ignores how the company is financed.
- **Free-cash-flow yield: 8.8%** (5-yr avg 0.1%). Free cash flow equals 8.8% of the market value, above its five-year average of 0.1%, so the shares are cheaper on cash than they have usually been. Above 5% is generally attractive.
- **Earnings yield: 3.6%**. The inverse of the P/E: 3.6% of the price is earned each year.

## Profitability
- **Gross margin: 17.8%**. BAE Systems plc keeps 17.8% of revenue after the direct cost of what it sells, a thin margin typical of retail, distribution and commodity businesses.
- **Operating margin: 9.3%**. 9.3% of revenue is left after running the business.
- **Net margin: 7.3%**. 7.3% of each dollar of sales reaches the bottom line.
- **Return on equity: 17.5%**. 17.5% on shareholders' equity is solid.
- **Return on invested capital: 25.2%**. Return on all capital, debt included, is 25.2%: comfortably above what that capital costs.
- **Return on assets: 10.7%**. Each dollar of assets produces 10.7% of profit.

## Growth
- **Revenue growth (1 yr): 7.7%** (3-yr 10.1%/yr, 5-yr 8.0%/yr). Revenue grew 7.7% over the last year, against 8.0% a year compounded over five years.
- **EPS growth (1 yr): 6.3%** (3-yr 10.8%/yr, 5-yr 11.2%/yr). Earnings per share rose 6.3%, roughly in step with revenue.
- **Free-cash-flow growth (3 yr): 5.9%/yr**. Free cash flow has compounded at 5.9% a year over three years, keeping pace with earnings: the growth is real cash.

## Financial health
- **Debt to equity: 0.77**. Debt is 0.77 times equity, moderate leverage.
- **Net debt / EBITDA: 0.7×**. It would take 0.7 years of operating earnings to repay net borrowings, within the comfortable range.
- **Interest coverage: 4.8×**. Operating profit covers interest 4.8× over, a safe margin.
- **Current ratio: 0.99** (quick 0.87). Current liabilities exceed current assets, so the company depends on ongoing cash generation or refinancing to pay the next year's bills.
- **Altman Z-score: 2.74**. A Z-score of 2.74 is in the grey zone; not distressed, not clearly safe.
- **Piotroski F-score: 9/9**. 9 of 9 fundamental checks pass: strong and improving financials.

## Dividends
- **Dividend yield: 1.93%** (0p per share, trailing). BAE Systems plc yields 1.93%, a modest yield more typical of a growth-oriented payer.
- **Payout ratio: 50%** (39% of free cash flow). 50% of earnings goes out as dividends, leaving room to keep raising it.
- **Consecutive years of increases: 26**. 26 straight years of increases (the data covers 26 years, so this may be longer): a record very few companies hold.
- **Dividend growth (5 yr): 8.0%/yr** (1-yr 10.4%). The dividend has grown 8.0% a year over five years.
- **Shareholder yield: 3.8%**. Dividends plus net buybacks return 3.8% of the market value a year.

## Analyst view
- **Analyst consensus: buy** (19 analysts). 19 analysts cover BAE Systems plc; the consensus is buy, with an average price target of 2343p (+20% from the current price). Analyst opinion is shown for context; it is not part of the Fundamental Score.

## Price and momentum
- **Total return (1 yr): 10.7%** (YTD 14.8%, 3-mo 0.7%). The shares are up 10.7% over twelve months including dividends.
- **From 52-week high: -17.2%** (27.7% above the low). Trading 17% below its 52-week high.
- **200-day average: below**. The price sits below its 200-day moving average, the usual definition of a downtrend.
- **RSI (14-day): 34**. An RSI of 34 is neutral.
- **Beta (1 yr): 0.80** (volatility 31%). Beta of 0.80 against the FTSE All-Share: the shares move roughly with the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=BA.L · Page: https://foliofundamentals.com/stocks/ba.l

Not investment advice.