From mid -February, shares in a defense company BAE systems (LSE: Ba) jumped out. In fact, in just seven weeks the price of BAE shares increased by 30%.

The company has niche capabilities and a solid book with orders at a time when defensive expenses on their basic markets look significantly increased.

By accepting the perspective of a long -term investor, can BAE Systems shares be potentially worth considering even at the current price?

The valuation looks high on me

The company is currently trading in a price -profit (p/e) price -of -profit ratio. It is high for me, although it is part of a wider trend of enormous British defensive contractors who boost their valuations much delayed. Rolls-RoyceFor example, it trades against P/E 22.

The price of Bae’s action has been the last three years. Last year, however, revenues were 36% higher than in 2020, and during this period net profit increased by 50%. So, while both of these numbers are impressive, the boost in share prices has exceeded them significantly.

It suggests that investors are considering the company’s future prospects, deciding how its shares are.

But defense is an industry harassed by exceeding costs, changing briefs and unexpected delays. Therefore, an attempt to understand the future perspectives of a company such as BAE can be a very subjective activity.

Only one example indicates: tariffs.

As recent research with AJ Bell And Bloomberg shows that Bae has 59% of its US facilities – and this uniform market is 46% of sales. Thus, changes in American tariffs could significantly negatively affect BAE’s profitability.

2025 should be mighty

Even for this, I expect the company to achieve well this year.

Current guidelines for 2025, assuming the same exchange rate as last year (risk itself), provide for sales boost by 7%-9%and an boost in profit to share by 8%-10%.

I think these numbers look absolutely solid if they are achieved. However, they are far from transformational.

Remember the recent mighty boost in BAE share prices, as well as the ratio of P/E in the mid -1920s. For me, this type of valuation is more in line with the company in a very mighty growth mode than one that looks at a high percentage percentage in key indicators, such as profit per share, even if its industry is demanding.

Meanwhile, Bae indicates this “Record order arrears“.

On the one hand, I see it as positive: orders flow. On the other hand, too much arrears can be a problem for defense contractors.

The longer orders they accept, the less satisfied customers they can be – and this may be problematic not only in terms of future order flow, but also sometimes causes a financial penalty.

I expect Bae to have a mighty 2025 and hoped that he could last in the coming years. But I think the price of BAE shares is already being built in this expectation. In order for participation to boost much higher, I think it would require stronger news about profits or orders.

I have no plans to invest.