At £12.95, the BAE Techniques (LSE:BA.) share price has soared by virtually 120% since Russia invaded Ukraine three years in the past. It’s charging greater once more after a disappointing finish to 2024, pushed by renewed fears over the geopolitical panorama.

A powerful set of full-year financials on Thursday (19 February) have helped gas this recent transfer greater.

If dealer forecasts are appropriate, BAE’s shares will proceed to surge over the following 12 months. However how practical are present projections, and will traders take into account shopping for the FTSE 100 share for his or her portfolios?

Double-digit good points predicted

There’s a broad vary of analyst predictions for BAE Techniques’ shares over the approaching 12 months. One notably bearish forecaster believes the corporate might fall as a lot as 5% between now and February 2026, to £25.25 per share.

On the reverse finish of the size, probably the most bullish dealer thinks BAE will rise as excessive as £16.85 per share. That’s up a hefty 30% from present ranges.

Nevertheless, the common price goal amongst 17 brokers with scores on the inventory is £14.77 per share. That marks a 14% premium to at this time’s price.

Good worth

That implies additional wholesome upside from present ranges. When mixed with potential dividends, traders might reap extra FTSE 100-beating returns with BAE Techniques over the following 12 months.

That stated, it’s vital to notice that BAE’s valuation is greater at this time than at any level prior to now decade. This might in principle restrict the prospect of further price good points.

At 17.7 occasions, the present ahead price-to-earnings (P/E) ratio sits above the 10-year common of roughly 15 occasions.

But traders must also do not forget that BAE Techniques shares nonetheless commerce at a hefty low cost to a lot of its abroad friends.

France’s Safran and Germany’s Rheinmetall, as an example, commerce on potential P/E ratios of 33.4 occasions and 32 occasions respectively. Italy’s Leonardo trades on a a number of of 21.8 occasions. And within the States, RTX carries a P/E of 20.5 occasions.

Gorgeous progress

Given its sector low cost and the beneficial buying and selling panorama, I consider BAE Techniques’ share price might proceed rising as Metropolis brokers predict.

Final week’s sturdy buying and selling replace once more underlined the corporate’s glorious momentum. Income leapt 14% in 2024, to £28.3bn, whereas its order backlog rose by £4bn to report highs of £77.8bn.

Pre-tax revenue rose 6% from 2023 ranges, to £2.6bn.

BAE’s top-tier provider standing and various vary of capabilities place it properly to satisfy rising demand. Following on from final 12 months’s sturdy efficiency, it’s predicted annual gross sales progress of seven% to 9% in 2025, too.

Fast rearmament within the West has supercharged defence sector gross sales since early 2022. And following US threats to scale back its navy safety, progress might speed up as European nations spend to compensate for Uncle Sam’s lowered position.

Provide chain issues and venture disruptions might affect BAE’s capacity to develop earnings. However the firm’s sturdy report of execution helps soothe any fears I’ve. I feel it stays a prime progress inventory to contemplate.