London, Jan 11, 2026, 0806 GMT — The market has closed.
- Shares of BAE Systems climbed 1.5% on Friday to 2,053 pence, brushing close to a 52-week peak.
- U.S. policy risk resurfaced following an order linking contractor payments directly to delivery timelines.
- Investors will be watching closely for BAE’s preliminary full-year results, due February 18.
BAE Systems plc shares closed Friday 1.5% higher at 2,053 pence, holding close to a 52-week peak. Investors balanced fresh U.S. scrutiny over contractor payments with discussions of expanded military budgets.
The stock’s recent surge places it in a range where even minor policy tweaks and changes in cash returns can sharply sway sentiment. BAE, which sells extensively in the United States, has seen capital returns play a key role in its story.
London’s market is closed Sunday, setting the stage for Monday’s open to deliver a fresh take on the defence sector following a volatile week and a packed slate of U.S. policy news.
BAE ended Friday at 2,053 pence, having reached 2,074 pence earlier in the day. The shares have gained roughly 17% since January 2 and have climbed in every session so far this year, according to data from Investing.com. (Investing)
In Washington, defence contractors are scrambling for legal advice after President Donald Trump issued an executive order tying share buybacks, dividends, and executive pay to weapons delivery schedules, three sources told Reuters. White House spokeswoman Anna Kelly declared, “the days of defense contractors prioritizing investor returns over military readiness are over.” Morgan Stanley analyst Kristine Liwag described the combination of payout restrictions and a larger budget target as “carrots and sticks.” Franklin Turner, a federal contracting lawyer at McCarter & English, cautioned: “The real chilling part of this is that many contractors are going to get a nasty letter.” (Reuters)
Risk appetite broadened, pushing the FTSE 100 to a record closing high on Friday. U.S. jobs data fueled expectations for rate cuts, Reuters reported, boosting both defensives and cyclicals in certain sectors. (Reuters)
BAE has set clear targets for itself. In its November trading update, the company reaffirmed its 2025 outlook, forecasting sales growth between 8% and 10%. It expects “underlying” EBIT—operating profit before certain one-offs—to rise 9% to 11%, with underlying EPS climbing 8% to 10%. The company also plans to return roughly £1.5 billion to shareholders next year, including about £500 million through share buybacks. Preliminary full-year results are due on Feb. 18. CEO Charles Woodburn described the group as “confident in the outlook for our business.” (Investegate)
But the situation isn’t one-sided. Should Washington ramp up enforcement on schedules and penalties, firms heavily tied to the U.S. might see increased hurdles on cash returns, even if budget figures look stronger. Quick-moving stocks tend to amplify that kind of uncertainty.
Traders will be watching closely to see if the rally stays above the 2,000-pence mark following the jump, and if comments from peers in the next few days hint that the executive order will alter buyback and dividend practices.
BAE’s next major event is Feb. 18, when it will release preliminary full-year results. Investors will be watching closely for updates on cash flow, backlog conversion, and any guidance on capital returns for 2026.
