Bae Share Price Rises as BAE Posts Record Backlog and Strong 2025 Results
The bae share price has jumped 65% in the past year, a surge underscored by full-year results on 18 February showing underlying operating profit up 12% to £3. 32bn and a record order backlog of £83. 6bn.
Bae Share Price and analyst targets
The rally leaves some broker forecasts cautious. Seventeen analysts offering 12-month forecasts produce a consensus target of 2, 237p for BAE Systems, implying a modest rise of about 5. 35% from today. Nine analysts set a consensus target of 1, 547p for Babcock, implying roughly 11% upside, while sixteen analysts give Rolls-Royce a median 12-month target of 1, 333p, suggesting about 2% gains. Rolls-Royce’s trailing P/E stands at 65.
How big the run has been
Over one year BAE Systems is up 65% and over five years it is up 322%. Babcock has outpaced BAE, rising 118% in one year and 411% over five years. Rolls-Royce has been the standout: up 116% in one year and an astonishing 1, 070% over five years.
Orders, shipyards and expansion
Commercial and defence contracts are driving the industrial backdrop. In the third quarter of last year Norway ordered at least five Type 26 ships in a contract valued at roughly £10 billion to the UK economy, added to another five ships already under construction for the British Navy, and BAE seeks to build a total of eight ships for the UK. The company launched a new factory in Scotland in 2025 and has tripled capacity at its Jacksonville shipyard, while the maritime unit’s revenue rose 11% in 2025 to £6. 8bn and maritime orders stood at £5bn.
On submarines, CEO Charles Woodburn announced on the company’s 2025 earnings call held on February 18 that the firm intends to provide state-of-the-art nuclear-powered submarines for Australia. BAE also supplies submarine parts and ongoing ship repair and modernization to the U. S. Navy.
Aircraft, MBDA ties and new defence tech
BAE’s aircraft business showed strength in 2025: a Turkish order for 20 Typhoon planes is expected to generate £4. 6bn, the air business produced £4. 2bn of revenue from MBDA (a joint venture with Airbus and Leonardo), and the air division recorded £15bn of orders in 2025. BAE holds a 37. 5% stake in MBDA; MBDA’s annual orders have risen from around €4bn since 2021 to €13bn now.
In other wins, BAE obtained a $1. 2bn deal in June from the Space Force to provide missile-tracking satellite capabilities tied to a broader U. S. missile-defence initiative. The firm is also developing drones that can configure their own software for missions and technology to lower the cost of counter-drone products; Secretary Pete Hegseth has backed a large increase in the drone fleet.
Financials, valuation and short-term risks
BAE trades on a P/E of 28. 5. Full-year figures posted on 18 February showed underlying operating profit up 12% to £3. 32bn, net debt down 22% to £3. 84bn, and a backlog at a record £83. 6bn. Babcock’s P/E sits at 27. 9; its first-half results on 21 November showed underlying operating profit up 19% to £201m and a contract backlog of £9. 9bn. Company-wide 2025 totals included sales up 10% to a record £30. 7bn and operating earnings up 9% to £2. 93bn, while backlog rose £5. 8bn to £83. 6bn.
But valuations are stretched and expectations are high: even a small earnings miss could be punished, and some broker forecasts may include stale assumptions. Smaller FTSE 250 defence names such as Chemring, Goodwin and QinetiQ have also rallied.
Geopolitics pushing defence spending
Rising geopolitical tensions are a clear demand driver: Russia and Ukraine remain locked in conflict, the U. S. and Iran are close to confrontation, and China is described as a major concern. Germany is planning to invest €500bn into arms, other European states are being pushed to raise spending, and there is talk in the UK of a £28bn defence 'black hole'. Those shifts have lifted orders and backlogs but also raised the bar on expectations.
Investors will be watching Rolls-Royce’s full-year results on 26 February as the next confirmed milestone on the calendar; market attention to that release is likely to influence near-term moves across the defence names discussed here.
