Saab (OM:SAAB B) Valuation Check After Surge in European Defense Contracts and Rapid Share Price Gains

Saab (OM:SAAB B) just strung together a run of sizeable European defense orders, from French GlobalEye surveillance aircraft to Baltic missile and ground combat systems, giving investors fresh reasons to revisit the stock’s trajectory.

See our latest analysis for Saab.

Those contracts help explain why momentum in Saab’s shares has picked up recently. A strong 1 month share price return of 14.42 percent has fed into an impressive 1 year total shareholder return of around 142 percent.

If this defense run has you rethinking the sector, it could be a good moment to explore other opportunities across aerospace and defense stocks for ideas beyond Saab.

Yet with Saab now trading above the average analyst price target and its valuation multiple expanding alongside order momentum, it raises a key question for investors: Is there still a buying opportunity here, or is future growth already priced in?

Most Popular Narrative: 14.2% Overvalued

With Saab closing at SEK559.8 against a narrative fair value of SEK490.4, the story leans toward optimism that still outpaces modeled fundamentals.

The analysts have a consensus price target of SEK504.571 for Saab based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SEK600.0, and the most bearish reporting a price target of just SEK374.0.

Read the complete narrative.

Want to see what justifies paying up for a defense stock like this? The narrative leans on rapid top line expansion, rising margins and a rich future earnings multiple that looks more like a growth pure play than a traditional contractor. Curious how those moving parts combine into that fair value call? Read on to uncover the projections behind the headline number.

Result: Fair Value of $490.4 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution missteps on large defense programs or tighter export controls could quickly challenge the upbeat growth assumptions embedded in today’s valuation.

Find out about the key risks to this Saab narrative.

Build Your Own Saab Narrative

If you see the setup differently or prefer testing the numbers yourself, you can build a personalized Saab view in minutes: Do it your way.

A great starting point for your Saab research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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