(News Bulletin 247) – Oddo BHF maintains its ‘neutral’ rating on BAE Systems shares, with an unchanged price target of 1070 pence.
Yesterday, BAE Systems announced the acquisition of Ball Aerospace, thereby strengthening its position in space, for an enterprise value of $5.5 billion.
‘At first glance, the valuation multiples may seem slightly high at 2x 2024e sales and c17x EBIT post cost synergies estimated at $30m in the long term, but they include the expected dynamic growth profile (c10% pa)’, indicates the analyst.
The closing is scheduled for H1 2024 and should not be problematic, according to Oddo, since overlaps are limited between the two companies.
‘In the end, we estimate that the acquisition of Ball Aerospace will be accretive by c1.4% in 2025e and 2.3% in 2026e’, concludes the broker.
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