LONDON, March 17, 2026, 16:55 GMT
Shares of BAE Systems ticked up 0.4% to around 2,331 pence on Tuesday, brushing a session high near 2,346 pence. The British defense group announced new U.S. Air Force work and hovered close to all-time highs. The stock stayed resilient as Reuters flagged a broader slip in European defence names.
Resilience stands out, given BAE shares had already more than tripled since Russia invaded Ukraine in 2022 by the time results landed last month. In those numbers, BAE reported a record order backlog of 83.6 billion pounds—projects signed but not yet fulfilled—and guided for 2026 sales growth between 7% and 9%. Operating profit is set to increase 9% to 11%.
The latest contract on Tuesday gives BAE more long-term work. Robins Air Force Base tapped the company to handle support and sustainment for the AN/ALQ-221 Advanced Defensive System on the U-2 reconnaissance jets. The job covers repairs, software updates, and other electronic warfare needs—the gear that helps the aircraft spot, jam, or dodge enemy radars and missiles. “This system is part of our long legacy in electronic warfare,” said Tim Angulas, who heads up BAE’s U-2 product area. PR Newswire
Demand trends remain robust. On Tuesday, Honeywell Aerospace CEO Jim Currier said defense appetite isn’t “waning at all,” with rising geopolitical tensions driving sector-wide investment. Reuters
Investors aren’t treating defence stocks as a single bet anymore. Leonardo surged nearly 9% to an all-time high on March 12, after the company raised its targets and put more weight behind its digital-defence strategy. Rheinmetall, by contrast, dropped almost 8% that day, with a weaker cash-flow forecast putting traders off.
That’s the risk facing BAE right now. Honeywell on Tuesday flagged potential delays for some first-quarter revenue, pointing to shipping issues into the Middle East. Joost van Leenders, strategist at Van Lanschot Kempen, warned that “volatility in rate expectations can last” if oil prices surge again—highlighting how conflict can both push defense spending higher and snarl supply chains and rate projections. Reuters
Rheinmetall’s slip underscored sentiment across the sector. JPM analysts described investors as “wholly focused on execution,” zeroing in on whether defense companies actually deliver cash and margins from expanding order books—especially now, with shares circling highs. Reuters
BAE continues to benefit from steady contract wins and a solid run of momentum. Back in February, Chief Executive Charles Woodburn pointed to a “new era of defence spending” as 2025 operating profit climbed 12%. Tuesday’s contract bolstered that narrative in a market still valuing clarity, though it’s not quite as lenient as it was just weeks earlier. Reuters
