While this year we saw many stocknations, one company that touched it BAE systems (LSE: Ba). The price of Bae has increased 51% From the beginning of 2025, this means that it has more than we will triple Over the past five years.

For a common defense sector, this is very sturdy performance.

Can he continue – and if so, should I consider adding participation to my wallet?

Bae Systems has a wind in the sail

The defense environment has changed significantly over the past few years, which has led many European governments to boost their budgets. It was good news for defense contractors around the world, including BAE systems.

For example, last year, the British defense giant recorded a 14% boost in revenues. Meanwhile, net profit increased by 5% and fell near £ 2 billion.

The company expects that sales and profit per share will boost this year by average to low double percent.

The liquid final market may not always mean an opportunity

But although defense expenses are stronger than before, I have some concerns.

In the past, we have seen that when times are sturdy, defense contractors can get Gung Ho to contain long -term offers that become costly for them, because the costs boost over time.

Looking at this airy, I have mixed views of Bae’s backlog. It ended last year at a record level of 78 billion pounds. That’s good because it shows that the company has a lot of work to keep it fully occupying. But this may also connect the company for many years, and some of these orders may be less profitable than now, when they are finally delivered.

In addition, Bae Systems has a sturdy global presence, including in the USA. The ongoing tariff uncertainty can divert attention for the growth of management, and can also eat in the lower line.

Considering this, the current ratio of BAE’s share price to profit of 27 looks costly to me. I think I offer me insufficient safety margin, even if some of these risks.

The shoot can continue

This does not mean that the price of BAE shares may not go above. The last momentum indicates that many investors are excited about the company’s prospects. This can facilitate raise the price of the action. A vast contract win or other positive messages can also boost the price of shares.

But as an investor, I focus on the basics, not the momentum. Based on what we currently know about the commercial perspective of the company, I think the price of the action is costly. I have no plans to invest.