London, March 24, 2026, 15:43 GMT
BAE Systems slipped another 1.2% in London on Tuesday, trading near 2,115 pence after dropping 4.9% to 2,140 pence the previous day. Shares now sit about 10% under last week’s 52-week high of 2,360 pence.
What caught attention: BAE posted its 2025 annual report on Tuesday. The filing, though, left the outlook unchanged from what the company laid out in February’s prelims. Back then, BAE reported a 12% bump in full-year operating profit, a record order backlog of £83.6 billion and guided to 7%-9% sales growth for 2026. CEO Charles Woodburn at the time called it a “new era of defence spending.” Investegate
Against that setup, there’s not much space left for a standard filing to move the needle. Even after Tuesday’s slip, Trading Economics data had BAE up close to 35% for the past year.
On Tuesday, sector moves dominated, overshadowing individual company action. According to Reuters, the European aerospace and defence index slid 1.8%. Choppy headlines about the Middle East war sent oil shooting past $100 a barrel, draining risk appetite. “Markets hadn’t priced in a closure of the Strait of Hormuz,” said David Morrison, senior market analyst at Trade Nation. Reuters
On Monday, oil sank over 10% as the U.S. hit pause on strikes targeting Iranian energy sites, knocking a hole in the war premium that’s been baked into prices. That reprieve didn’t last. After Tehran dismissed any signs of a breakthrough, crude snapped back on Tuesday.
Investor appetite is splitting within the defence sector. Shares of Italy’s Leonardo surged to an all-time high this month after the company raised its guidance. Over in Germany, Rheinmetall tumbled close to 8% as its forecasts for 2026 margins and cash flow came up short.
Policy fundamentals remain solid in the bigger picture. On Tuesday, EU Council President Antonio Costa expressed confidence that Britain and the European Union are on track to strike an agreement over UK involvement in the bloc’s 150 billion euro SAFE defence fund. Right now, British companies are eligible for up to 35% of a project’s value under third-country provisions.
But near-term risk isn’t one-sided. If a ceasefire path emerges, defence stocks could lose more of their conflict premium. On the flip side, a sharp Gulf supply hiccup could send oil prices higher and add pressure to broader markets—even if weapons demand remains robust.
