Proactive Investors
18 May 2026, 14:48 UTC · 3d ago
Chemring, Babcock and Avon top picks in defence sector, with BAE premium 'not justified'
Source · https://www.proactiveinvestors.co.uk/companies/news/1092475
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Proactive Investors
18 May 2026, 14:48 UTC · 3d ago
Source · https://www.proactiveinvestors.co.uk/companies/news/1092475
Read sourceSearch tags
Story key points
5 claims · impact-rated
Jefferies predicts earnings growth of over 25% for 2027 and 2028 for Chemring Group's cyber and intelligence arm, Roke. — Specific, high-growth earnings forecasts for a 'top pick' usually act as a strong positive catalyst for the stock price.
+0.60UK defence stocks may regain momentum upon the publication of the long-delayed Defence Investment Plan. — The removal of a primary macroeconomic headwind (lack of a spending roadmap) is a positive trigger for the broader sector.
+0.40Jefferies maintains 'buy' ratings on Avon Technologies and Babcock International despite UK budget uncertainty. — Positive broker sentiment and identified strengths (margin improvement for Avon, contract longevity for Babcock) support price stability.
+0.30BAE Systems is trading at a premium to US and European peers without commensurate growth to justify the valuation. — Relative overvaluation and the note that good news is already priced in suggest limited upside or potential for a correction.
-0.30Ariana Resources raised US$19.5 million by selling a 13.6% stake in Zenit to fund its Dokwe gold project. — Securing project funding via asset divestment reduces immediate liquidity risk for the development of the Zimbabwe project.
+0.20Impact vectors
5 dimensions · 9 clusters
Market reaction
0 bid · 0 offered
No stock impact ranking available yet.
No stock impact ranking available yet.
Ticker attribution
Model heads
Named as the 'top pick' in the sector with a buy rating and strong growth predictions for its Roke arm.
Maintains a 'buy' rating and is viewed as insulated by long-term government contracts.
Maintains a 'buy' rating with potential for significant margin improvement and cash generation.
Successfully raised US$19.5 million to fund its Dokwe gold project.
Initiated at 'hold' with warnings that investor optimism regarding margins may be unjustified.
[mutual] Both companies operate within the UK defence sector and are evaluated as peers by Jefferies.
[mutual] Both companies operate within the UK defence sector and are evaluated as peers by Jefferies.
[mutual] Both companies operate within the UK defence sector and are evaluated as peers by Jefferies.