Britain's BAE Systems lifts 2026 outlook as defence orders soar

BAE's shares, which have rocketed 260% over the last five years and 18% in the year to date, were up 1% in early deals after it said it expected underlying operating profit to rise by 10% to 12% this year, up from its previous 9% to 11% forecast.

"BAE Systems has once again demonstrated why it remains one of the standout names in the European defence sector," said Quilter Cheviot analyst Matt Dorset.

"The upgraded guidance reflects both the strength of execution and the structural tailwinds supporting the sector."

Woodburn was at BAE's shipyard in Barrow, north-west England, where he will be joined by Britain's new Prime Minister Andy Burnham and new defence minister Wes Streeting. They will hand BAE the latest phase of a submarine contract worth £5.9 billion ($7.87 billion).

"The fact that he's here ... I think says a lot about their commitment for defence," Woodburn told reporters when asked about the direction of Britain's defence spending.