BAE Systems Share Price: What Next for this FTSE 100 Giant?

The BAE Systems share price has done relatively well in 2022 as demand for its products and services has jumped globally. The BA shares are trading at 793p, which is slightly below the year-to-date high of 842p. It has jumped by more than 55% from the year-to-date low, making it one of the best-performing stocks in the FTSE 100.

InvestingCube's S&R Levels

FTSE100

FTSE100 (7052.2)

In Sell Zone

STOP

SELL

TP1

6835

TP2

6700

What next for BAE?

BAE Systems is one of the biggest defense contractors in the world and the biggest one in Europe. The company manufactures defense products for land, marine, and air. It has also become an upcoming player in the cyber warfare industry. 

Like other defense companies, BAE has had a strong performance in 2022 because of the ongoing war in Ukraine. Many countries, especially those in Europe, have decided to boost their defense spending in a bid to increase their protection. Sweden and Finland have also announced their intentions to join NATO.

BAE Systems said that its sales for the first half of the year rose to £10.5 billion from the £10.0 billion it made in the same period in 2021. Its underlying earnings per share rose from 21.9p to 24.5p. Most importantly, the company’s order intake rose from over £10.58 billion to over £17.9 billion. Its backlog rose to over £52.7 billion.

BAE Systems expects that its revenue will rise by between 2% and 4% in 2022 while its free cash flow will be less than £1 billion. However, the company has suffered from the soaring costs of raw materials. These costs have been partially offset by the weak pound. In its first half report, the company said that its EPS was seeing a 1 pence impact for every 5 cent movement. 

BAE Systems share price forecast

The daily chart shows that the BAE stock price has been in a strong bullish trend in the past few months. It has formed an ascending channel that is shown in black. The stock has moved above the 25-day and 50-day moving averages. The current price is slightly above the lower side of the ascending channel. 

Therefore, the stock will likely continue rising as bulls target the year-to-date high of 847p. A drop below the support at 750p will invalidate the bullish view.

BAE SHARE PRICE