ShoreCap recommends using weakness to 'buy' BAE Systems shares
ShoreCap termed BAE System's latest interims "a vote of confidence" and reiterated its 'buy' recommendation on the defence contractor's shares on the back of recent weakness.
"These results are a vote of confidence for the Group and supports our view that BAE Systems deserves to retain its position as the premium option across our UK defence coverage," they said in a research note sent to clients.
In their opinion, the approximately 10% downdraft in the shares from their late April highs was triggered by the U.S. debt ceiling saga and the failed Wagner mutiny.
But both were now in the rear-view mirror, they said and the macroeconomic landscape remained "favourable" for the engineer.
Among other factors, they called attention to the group's better-than-expected free cash flow during the half of £1,07bn (ShoreCap: £311m).
They also anticipated that they would upgrade their fair value estimate of 1,166.0p on the shares.