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BA.

Bae Systems PLC

Industrial Goods and Services First-pass screen £61.4bn
490/1000 Overall fit
AI beneficiary 35% 40
Operating leverage 25% 62
Valuation 25% 30
Downside protection 15% 78

First-pass take

BAE Systems is a mature defence prime with record £77.8bn order backlog (2.7x revenue visibility) and £2.5bn FCF, providing exceptional downside protection. However, it lacks explicit AI exposure—autonomy and UAS remain R&D stage—and flat group margins (10.6%) despite 14% EBIT growth indicate limited operating leverage. No valuation multiples disclosed; capex (>£1bn annually) constrains FCF conversion.

Flags

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