Last year was great for both of them BAE systems (Lse: ba.) And Rolls Royce (LSE: RR) shares. But what about the next 12 months?

the FTSE 100 Defense and space champions increased by 41 % and 121 %, respectively, during the past year. For five years, they rose 270 % and 1,240 % ridiculous.

The recovery after the guardianship of civil aviation, CEO of TUFAN TUFAN Erginbilgiç, gave a great launching platform when he took office in January 2023. Rolls-Royce is also also to forget the defense, although BaE is a specialist. The geopolitical fears have strengthened the sector. Germany and others pump money into re -armament. It can be said, this is the prices now.

FTSE 100 Warhorses

Both companies published the results of half the year last week. On July 30, Bae Systems recorded a 11 % jump in sales to 14.6 billion pounds, while the basic EBIT increased by 13 % to 1.6 billion pounds. The amount of demand decreased slightly to 13.2 billion pounds, from 15.1 billion pounds last year.

The stocks have slowed a little recently, but I still see a lot of long -term potential. Defense contracts take years to fulfill, and this means years of seeing revenue as well. It is useful for investors to follow the long -term approach.

The next day, Rolls -Royce broke the expectations. once again. The basic operating profit increased by 50 % to 1.73 billion pounds, as revenues increased by 13 % to 9.06 billion pounds. Free cash flow jumped to 1.58 billion pounds. The civil space increased 17 % to 4.79 billion pounds. Energy systems increased by 20 %. The slow slow slow was defense, with only 1 % increase. The shares increased by another 10 % a day.

Profits, growth and cash flow

There are risks, though. It will be the largest unexpected peace deal. It is unlikely, but not impossible. Another is the financial. European governments may prepare more weapons, but may struggle to bear their costs.

Both companies also face the company’s obstacles. For BAE, the danger is the stagnation of the system. It has already decreased slightly, and it may not recover if politicians delay the major projects or withdraw their feet on the goals of NATO spending.

The upper expectations in the sky are a source of concern for Rolls -Royce. The one in the growth can lead to a fixed reset. As a aircraft motorist, Rolls is exposed to market fluctuations because the aviation sector can be volatile.

What analysts expect

Where can 10,000 pounds today end today? Sixteenths expect a one -year average target of 2,107 pixels for BAE systems, up from 1813.5p today. This is a 16 % expected profit, which may get an investment of 10,000 pounds to 11,600 pounds. It is not bad at all.

Twelve analysts expect a medium price of 1,048 pixels for Rolls-Royce, which is less than 1.6 % less than 1,069.5p. It would shrink 10,000 pounds to 9,840 pounds. These goals are likely to be before last week. But they do not surprise me either. I don’t know how long it can keep Turbo Tuffan, as is now known, at its speed.

Rolls-Royce has two new options for growth in small nuclear reactors and the aircraft narrow aircraft for the body. If they are defeated, they can rise higher. Trading in price to profits (P/E) from 52.8, the air deviates there.

I think Bae Systems looks more stable. It is not cheap with P/E of 26.3, but it is well managed and established in decades. You deserve to look.

Rolls-Royce may be more volatile. Thanks to the maximum £ 90 billion market, shares are unlikely to double next year. Even miracles come with a warning. But it is impossible to ignore it now.