Bae Share Price: See the surprising Babcock, Rolls-Royce, and bae share price forecasts for the next 12 months
The rapid advance in defence stocks has pushed the bae share price sharply higher: BAE Systems rose 65% in the last year and is up 322% over five years. That strong run comes alongside still-buoyant moves in peers and elevated market expectations.
Bae Share Price and FTSE position
BAE Systems operates as a central enterprise within the UK equity market, forming part of the FTSE 100, FTSE 350, FTSE UKX and FTSE All Share. The company anchors the aerospace and defence sector, which sits alongside financial institutions, consumer enterprises, technology companies and infrastructure providers across those indices.
Recent results and backlogs
BAE’s full-year results on 18 February showed underlying operating profit rose 12% to £3. 32bn and beat forecasts. Its order backlog hit a record £83. 6bn and net debt fell 22% to £3. 84bn. In 2025 the company’s sales climbed 10% to a record £30. 7bn, operating earnings increased 9% to £2. 93bn, and the backlog rose by £5. 8bn to £83. 6bn. During 2026, unclear in the provided context.
Typhoon and naval orders
On the aircraft side, BAE received a large order from Turkey for 20 Typhoon planes expected to generate £4. 6bn for the company. The aircraft business produced £4. 2bn of revenue from MBDA, the joint venture with Airbus and Leonardo, while the air business recorded £15bn of orders in 2025.
In shipbuilding and maritime work, in the third quarter of last year Norway ordered at least five Type 26 ships in a contract valued at roughly £10bn to the UK economy. That large order came on top of an additional five ships the company was already working on for the British Navy at the time. Separately, BAE is seeking to eventually build a total of eight ships for the UK. The company also announced plans to provide "state-of-the-art nuclear-powered submarines" for Australia on its 2025 earnings call held on February 18, and it provides submarine parts plus "ongoing ship repair and modernization" to the U. S. Navy.
To support growth, BAE has tripled the capacity of its shipyard in Jacksonville and launched a new factory in Scotland in 2025. The maritime unit’s revenue jumped 11% in 2025 to £6. 8bn, while the business’s orders came in at £5bn.
Valuation and broker targets
Even after strong results, valuations are elevated. BAE Systems trades on a price-to-earnings ratio of 28. 5. Babcock International Group is scarcely cheaper with a P/E of 27. 9; Babcock’s first-half results on 21 November showed underlying operating profit up 19% to £201m and its contract backlog rising to £9. 9bn.
Rolls-Royce has been the standout: up 116% over one year and an astonishing 1, 070% over five years. Rolls makes aircraft engines, has a Power Systems division benefiting from AI data centre demand and a potential opportunity in small modular nuclear reactors. Rolls-Royce delivers full-year results tomorrow (26 February) and its trailing P/E stands at 65, described in commentary as dizzying.
Analysts’ 12-month forecasts show modest upside: 17 analysts produce a consensus target of 2, 237p for BAE Systems, implying a rise of just 5. 35% from today. Nine analysts covering Babcock have a consensus target of 1, 547p, around 11% higher. Sixteen analysts follow Rolls-Royce, with a median target of 1, 333p suggesting gains of just 2%.
Commentary in the market notes that broker forecasts are educated guesses and can include stale assumptions; after a blistering run valuations look stretched and expectations are high, meaning even a small earnings miss could be punished. One commentator said they personally would not consider Rolls-Royce at today’s dizzying P/E and might regret saying this tomorrow.
