London, June 23, 2026, 14:06 BST
BAE Systems shares rose about 0.4% to 1,818 pence on Tuesday, going against a drop in the wider London market after news on its part in a record radar deal from Australia to Canada and a fresh £500 million share buyback. The FTSE 100 was down 0.7% in the morning session.
BAE’s bounce clawed back just a portion of Monday’s 1.9% drop to £18.11. The stock is still trading about 23% under the £23.60 52-week high from March 18, with investors weighing if new orders and capital returns will jumpstart the defence contractor’s run.
Australia is set to sell Canada over-the-horizon radar technology in its biggest defence export yet. The government-to-government deal is valued at A$2.5 billion, or $1.75 billion. This is the first time Australia has sold the radar overseas. The technology can monitor aircraft, ships and missiles from thousands of kilometres away.
BAE Systems Australia is taking the industry partner role on the project. The radar uses high-frequency waves and the ionosphere to follow objects past the horizon. “This is a significant opportunity for both Australian and Canadian industry,” said Craig Lockhart, BAE Systems Australia chief executive. BAE Systems
BAE is set to begin delivery work on the programme July 1. Canada’s government said it wants initial operational capability by December 2029.
BAE has tapped JPMorgan Securities to buy up to £500 million of its own stock as part of the last part of a three-year, £1.5 billion buyback. The company expects the purchases, which will result in the shares being cancelled, to wrap up by June 30, 2027. Buybacks like this take shares off the market, which can lift per-share results by cutting the share count.
BAE ended its second tranche buyback after picking up close to 26.1 million shares for about £500 million, paying an average 1,916.59 pence each. That’s higher than where shares were quoted on Tuesday.
The defence sector has traded without a clear trend. Babcock International dropped almost 6% on Monday after it posted a 19% decline in full-year operating profit. That move came as the wider FTSE 100 advanced.
BAE started 2026 with a backlog of £83.6 billion in orders, the highest it’s ever had. Chief Executive Charles Woodburn called it a “new era of defence spending.” The group is guiding for 7% to 9% sales growth in 2026, and underlying EBIT, which strips out some one-offs, is expected up 9% to 11%. Reuters
But investors should be cautious about the A$2.5 billion radar deal headline. BAE hasn’t said how much of the government contract it books as revenue or at what profit margin. The deal runs over several years, so cost overruns, technical issues or shifts in government budgets could hit it. The buyback may help per-share numbers, but it doesn’t bring in new contracts or operating cash.
BAE has its next financial checkup set for July 30, when it reports first-half 2026 numbers.
