London, March 26, 2026, 15:14 GMT
Shares of BAE Systems edged lower in London on Thursday, adding to losses since last week’s top. At 1244 GMT, the stock was off 1.25% at 2,129 pence—roughly 10% under its March 18 high of 2,360p.
The significance here: BAE still stands out as perhaps Europe’s top rearmament play. NATO on Thursday reported that defence budgets jumped 20% across Europe and Canada for 2025. BAE, for its part, recently pointed to a record 83.6 billion pounds in orders waiting to be filled, and it’s guiding for 7% to 9% sales growth into 2026. Chief Executive Charles Woodburn described this as a “new era” in defence spending. Reuters
Wednesday brought fresh momentum from Washington: the Pentagon announced framework deals with BAE, Lockheed Martin, and Honeywell to boost munitions production, pushing manufacturers toward a so-called “wartime footing.” Part of the new arrangement—BAE and Lockheed are set to ramp up output of THAAD interceptor seekers by four times. These seekers, essentially guidance sensors, enable the missile to track its target. Reuters
Just hours on, Britain and Turkey inked a multi-billion-pound deal that ties into Ankara’s 8 billion-pound purchase of Eurofighter Typhoon jets. BAE and Leonardo UK make the supplier list, handling components and training gear.
Thursday brought more evidence of demand from missile manufacturer MBDA. CEO Eric Beranger pointed to the Iran crisis as “again increasing the need for ramp up,” with the company now projecting a 40% jump in output by 2026. MBDA has already put down 1 billion euros to stockpile inventory ahead of new contracts. Reuters
Still, the stock isn’t catching every lift from defence news. On Thursday, Helen Jewell, BlackRock’s international CIO for fundamental equities, pointed out that European defence names dropped nearly 4% in the four days after the first U.S.-Israeli strikes on Iran. The reason, she said: “crowded positioning, not fundamentals”—with too many investors chasing the same idea. Reuters
BAE slid along with a choppy market. By 1013 GMT, the FTSE 100 had dropped 1.1%, and European equities lost more than 1% as traders fretted over rising oil prices and renewed rate jitters. Defence stocks, Reuters noted earlier this week, had already started to slip as investors digested mixed headlines around Iran.
Shares are caught between rising demand and a market that’s already factored much of it in. Back in January, Investec’s Ben Bourne pointed out that pressure on U.S. contractors could “foster a rotation to UK defence companies.” That’s a big part of why BAE remains a focal point among UK defence stocks—even after Thursday’s slip cooled sentiment. Reuters
