After a rocky start to the year for Rolls-Royce (LSE: RR.) shares – the price saw a 19% fall from top to bottom – it seems that Britain’s largest manufacturer may have turned the corner. The recent days have seen several excellent pieces of news come out of the firm, three of which I think are worth highlighting:

• Early data suggests little-to-zero impact on flying hours from the Iran war.
• A significant contract signed on the introduction of SMRs (small modular reactors).
• A monster of a trading update, sending the share price up 8% on the day.

The upshot is that a number of analysts have been waxing lyrical about the stock. With many such analysts putting a £15 12-month price target on Rolls-Royce, it could mean it’s more likely the shares will surge by 20% or more in the next year.

Good cheer

Perhaps the most surprising titbit was the impact on flying hours for Rolls-Royce engines. The company announced that these had already recovered to pre-conflict levels. It turns out the vast majority of the issues were for the narrowbody sector, which the company has no dealings in.

There is a risk to be aware of here too. Rolls has plans to enter the narrowbody market in the near future. A prolonged Iran conflict may have some impact further down the line.

The second bit of good cheer came by way of progress on SMRs in Czechia. Terms have been agreed to build the first of six of these small nuclear power stations in the Central European country. The contracts have now entered the ‘execution phase‘ and the firm is expecting to generate revenues and profits this year. This is a giant leap for those of us who believe SMRs are one of the most realistic options for a future filled with green energy.

A possible buy?

The icing on the cake was the trading update to 31 March 2026. It’s been good news after good news from the company in recent years and this was no exception – the firm adding billions in market-cap in a single day.

The highlights? Outside of the two things mentioned above, reiterating guidance in the wake of a potentially impactful conflict in the Middle East was promising, and both operating profit and free cash flow are set to grow in the year ahead too.

It’s worth pointing out that Rolls-Royce now looks somewhat expensive compared to many other FTSE 100 stocks. The forward price-to-earnings ratio of 32 is not exactly cheap. We may need to see many more positive trading updates to justify the heady number.

On balance? It looks like the company is navigating what could have been a very difficult year. I believe a £15 share price doesn’t look too far away at all. The stock could be worth considering.

The post Is £15 the next stop for the Rolls-Royce share price? appeared first on The Twelfth Magpie.

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John Fieldsend has positions in Rolls-Royce Plc. The Motley Fool UK has recommended Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

In the first month of 2025, Greggs (LSE: GRG) shares were riding the crest of a wave. The low-cost bakery chain was rapidly expanding. The release of new products like the ‘vegan sausage roll’ had been making newspaper headlines. The share price had been surging on the back of the company’s rapid expansion up and down the country.

Articles covering Greggs shares were some of the most viewed here on The Motley Fool. The stock was one of the most exciting on the entire London Stock Exchange and seemingly destined to join the heavyweights on the FTSE 100.

What happened next? A rather large reversal of fortunes…

Why didn’t I buy?

Greggs‘ share price fell from 2,796p in January 2025 to 1,509p up to May. An investor opening a position in the early stages of last year would be looking at a paper loss of 46%. Yowzer!

This was no hypothetical exercise either. I wrote about Greggs shares numerous times near the peak of the hype and considered buying a small stake. The growth story looked compelling, with hundreds of locations opening every year. Its niche of a low-cost meal provider during a cost-of-living crisis looked attractive too.

In the end, I opted against the purchase. Why? The valuation played some role – a price-to-earnings ratio in the high 20s compared unfavourably to many other British stocks. You might remember how many were saying UK stocks were looking underpriced around then and the FTSE 100 did go on to have a mini bull run. The growing impact of inflation was a concern of mine too.

What next?

While I’m thankful that I opted against a decision that would have see me lose half my stake, the situation’s now somewhat different. Greggs’ shares are 46% cheaper than they were. Could they be a good buy today?

The plus side is that Greggs is still growing, adding over 120 new shops in 2026 on current expectations. And a price-to-earnings ratio of 12 looks attractive for a stake in a growing company. That’s half what it was in 2025 and a significant discount compared to many other UK stocks.

On the other hand, new problems have entered the fray. Wage costs have been rising due to government policy and inflation looks set to be a longer-lasting problem than first feared. The issues with casual theft have caused some stores to rework the floor plan to deter opportunistic robbers too. All issues that look likely to put a squeeze on margins.

Personally, I think this is one I will still be avoiding. Simply, I think there are better buying opportunities in Britain at the moment. I recognise there are plenty of opportunitiers though and think it could be one to consider for the right type of investor.

The post Thank goodness I didn’t buy Greggs shares in 2025 appeared first on The Twelfth Magpie.

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John Fieldsend has no position in any of the shares mentioned. The Motley Fool UK has recommended Greggs Plc and London Stock Exchange Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Well, I can’t say this was on my 2026 bingo card – on Thursday, 30 April, Diageo (LSE: DGE) shares got a 4% bump (equivalent to over £1bn in market capitalisation) from one of the unlikeliest of sources: the President of the USA.

The news has come at a welcome time for the beleaguered drinks manufacturer. The share price has fallen 55% in the last five years. This has led many to wonder (including me) whether the approval from a certain American potentate could kickstart a resurgence for the owner of Guinness, Johnnie Walker and Smirnoff.

Big news

First off, what was the news? The US is going to jettison all tariffs on Scotch whisky following the visit of King Charles III. It seems Mr Trump was won over by the King’s jokes about his predecessors trying to burn down the White House in 1814 and how if it weren’t for ‘us’ then you’d all be speaking French!

Or as Trump himself wrote on Truth Social in typically inimitable fashion: “The King and Queen got me to do something nobody else was able to do, without hardly even asking!”

Diageo has around 30% market share for Scotch whisky in the US, one of its biggest markets. So this has come at a particularly good time as one of the causes for concern for the FTSE 100 drinks titan was weakening demand across the pond.

The tariffs – at one point looking like they would be as high as 27.5% on all goods – were part of the reason for the massive ongoing fall in the Diageo share price. So the removal of the current 10% levy on whisky is welcome news indeed.

The 4% increase in share price on the day of the news was a pretty big move – a sign the stock could be heading in the right direction. Although there’s plenty more to consider.

A buy?

Welcome as the news is, the ongoing ‘tariff wars’ are only one part of the equation here. The bigger concern is one of declining consumption, particularly in key markets such as the US (tariffs or not) and the fall in sales of white spirits in China. The greatest worry is that this is the shape of things to come. And of course, the removal of tariffs could be followed up by new ones given Trump’s unpredictability.

Could all the worries be overblown? According to analysts covering the stock, the answer could very well be yes. Forecasts for the next two years look broadly optimistic with volume, revenue and earnings set to increase substantially in almost every region.

And if demand picks up then this could be a chance to buy in at a low valuation. The forward price-to-earnings ratio of 12 looks like one of the FTSE 100’s cheapest offerings. I’d not be surprised to look back on this as a low point in the years ahead. I think it’s worth considering.

The post Did Donald Trump just kickstart Diageo shares? appeared first on The Twelfth Magpie.

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John Fieldsend has positions in Diageo Plc. The Motley Fool UK has recommended Diageo Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

It seems that more and more people are waking up to the idea of using a Stocks and Shares ISA as the main place to invest and aim for passive income. And in many cases, this will be instead of buying property. Some might be opting against a buy-to-let because of the new rules for landlords that are being brought in. Some might simply prefer renting and want a more mobile place to park some cash.

The average house price in 2026 has grown to £274,000. What would that kind of sum look like in a Stocks and Shares ISA? And how much passive income might it return? Let’s answer those questions.

How much?

In simple terms, an investor might aim for a 5% dividend yield in the ISA, which would return £13,700 yearly from the £274k. This compares favourably to the current yields from housing, which hovers around 3%-7%. That figure does vary massively depending on location, house type, and other factors.

The long-term average, including share price appreciation, is closer to 10%. This would return an average of £27k a year. However, this would not be at all consistent with many down as well as up years along the way. Given the often volatile nature of the stock markets, it’s considered a bad idea to try to rely on such a high figure as passive income.

One side of the coin? Historical performance suggests stocks win handsomely in purely financial matters over long periods. The other side? There are no guarantees the future will be the same. A stuttering economy, a potential AI bubble popping, or a multi-decade stagnation like that Japan experienced are all risks investors should be aware of.

One option

Another advantage to the Stocks and Shares ISA is the flexibility of the type of investments within it. Let’s say you were bullish on the housing market in general. Then you might wish to consider a stock in a company like Taylor Wimpey (LSE: TW.) that builds houses up and down the country.

This does require doing the research of course. The housing sector is being rocked at the moment by inflation. The rising cost of materials and wages has led to a rough few years for such stocks. Taylor Wimpey shares have dropped 55% down to 79p. Someone who is not willing to take the rough with the smooth may think a house is a safer place to invest in.

Amid the turmoil, there may be a bargain hiding in plain sight too. Taylor Wimpey pays a huge dividend of 9.57% which looks stable for the short term. The possibility of falling interest rates could be a boon for the stock too. If general conditions improve, then this could be one of those stocks that perform above average and deliver passive income for years to come.

The post How much passive income could be generated from £274k in an ISA? appeared first on The Twelfth Magpie.

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John Fieldsend has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Lloyds (LSE: LLOY) shares currently pay a dividend yield of 3.7%. That kind of yearly payout is nothing to sneeze at, of course. But it’s hardly the kind of return on investment that will get pulses racing. It’s below what I could get from a Cash ISA at the moment, for one – and that return is guaranteed, too.

Here’s the thing. Focusing on a single year is not how you should approach investing in the stock of a company. What we want to do instead is look at the longer term and the effects of dividend growth and share price appreciation that could push that yield into the 10% range or even higher. Let’s take a look at how, using an example stake of £5,000.

How much in dividends?

Five years ago, the dividend yield offered by Lloyds shares was 4.69%. On the surface, it sounds pretty similar to today’s yield, doesn’t it? Except there’s a key difference.

Lloyds has enjoyed a terrific few years. Earnings have grown, and so has the share price and the dividend offered. An investor picking up a 45p share in 2021 would be looking at a forecast dividend today of 3.65p – that’s a yield of 8.03%. Not bad, but we can go one better.

Let’s reinvest the dividends collected along the way. To simplify the calculation, I will assume the reinvestment from each year’s dividends happens in May. Putting it together, the dividend yield would now be 10.93% on the original stake.

That means the £5,000 stake invested then would be looking at a dividend return over the next 12 months of £547. I should mention the stake itself has grown a great deal during that time too – it would now be £12,845.

That sounds pretty good to me. But can the good times continue?

A buy?

It should be pointed out here that the above results come during what has been a very good time for Lloyds Bank. Had I selected a five-year period shortly after the 2008 recession then the numbers above would not have looked so rosy. And looking towards the future, there are risks to be aware of in the coming years too.

Chief among them, perhaps, is Lloyds’ focus on mortgages. As the nation’s largest mortgage lender, the sluggish rate of housebuilding in the country and persistently high mortgage borrowing costs could both pose problems.

And with around 95% of revenue coming within these shores, the stuttering UK economy may be a drag on the stock too. Rivals like Barclays in the US and HSBC in China are attached to much faster-growing economies.

A counterpoint to the above is that the biggest driver of Lloyds recent success – higher interest rates, which mean higher margins for banks – is looking set to stay high. I saw a 6% inflation target being mooted a few days ago too. That could be another reason rates are kept high and mean the next five years of dividends would be similar to the last five. I think the stock is worth a look.

The post £5,000 invested in Lloyds shares 5 years ago now pays dividends of… appeared first on The Twelfth Magpie.

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HSBC Holdings is an advertising partner of Motley Fool Money. John Fieldsend has positions in Barclays Plc and Lloyds Banking Group Plc. The Motley Fool UK has recommended Barclays Plc, HSBC Holdings, and Lloyds Banking Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Morgan Stanley just took a huge hike to its price target for British American Tobacco (LSE: BATS) shares. A previous target of 3,050p was upgraded all the way to 4,900p. And that leap of around 60% marked a significant U-turn. The new rating of Overweight signals the analyst is expecting bright things. It calls the stock its “top pick in European tobacco”.

Pair this with a blockbuster dividend and a valuation on the cheap side and you’ve got what I’ve been saying for years — there could be plenty of life in the old dog yet. I suspect British American Tobacco could turn out to be one of those rarest of stocks that offer above average dividends along with big growth in share price.

Icing on the cake

To start with, the price target change was absolutely massive. What was the justification? What did Morgan Stanley like so much?

For one, the defensiveness of the category was highlighted. Tobacco sales tend to be inflation-resistant. The stickiness of the products often means tough economic times are more easily weathered.

A second point was its cash generation. British American Tobacco makes tons of money. And that means large dividends (a 5.67% yield is on offer at the moment) might continue rising in the years ahead.

A third point in the analysis was its undemanding valuation. A price-to-earnings ratio of 12 is well below the FTSE 100 average and compares very favourably with American competitors.

But the icing on the cake, for me, was the mention of the positive progress of non-combustibles. That means vapes and the like. These non-smoking alternatives really may be able to offset a future in which ciggies are even more on the decline.

Is it a buy?

That’s plenty of positives, so it’s likely worth looking at the negatives too. One obvious drawback for potential investors is the ethical dilemma of investing in a ‘sin stock’. Tobacco causes health issues and that’s not something many people will feel comfortable with.

Following on from that, the lowering consumption and possible outright ban of such products has to be considered too. The UK and New Zealand have already made steps to make smoking not long for this world. This could mean the business as a whole has a shelf life.

On the other hand, I think it’s worth pointing out that the demise of cigarettes has been predicted. But many of the businesses in the sector don’t seem to have been worried.

Here’s an interesting factoid. Which of the FTSE 100 companies on the index when it began in 1984 has made the best investment? You guessed it, British American Tobacco.

Perhaps the next 40 years will be more fruitful for the company than the doomsayers predict. I think it’s worth considering.

The post Time to buy cheap British American Tobacco shares before they reach 4,900p? appeared first on The Twelfth Magpie.

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John Fieldsend has positions in British American Tobacco P.l.c. The Motley Fool UK has recommended British American Tobacco P.l.c. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Cash ISAs are the most popular investment vehicle in the UK – around 46% of British adults have one (and I’m in that number!). Folks pop a little spare money inside these accounts and get a guaranteed return. I hear you ask: what could be wrong with that?

Well, quite a lot actually. When you dig into the actual numbers investors have achieved with a Cash ISA – and especially when you compare that performance against inflation – you can see that savers might be leaving tons of money on the table. This could be a huge financial mistake for a certain type of investor. Let me explain.

Magnifying glass

An article by investment broker Hargreaves Lansdown took a magnifying glass to ISA accounts over the 25-year period between 1999 and 2024. The findings? Investors putting £1,000 into a Cash ISA back when Britney Spears was first topping the charts would have seen the cash increase to £1,797.25 (and up to 2026, around £1,950).

An 80% return sounds decent for an account with no risk, right? For those who want maximum safety, then sure. This is the advantage of the Cash ISA: no chance of losing any money. I use mine for a rainy day fund, for example.

Here’s the problem for those looking to use it to grow wealth: inflation. A sum of £1,000 in 1999 was worth £1,856 by 2024. In real terms, the Cash ISA was losing about £2 a year. Crikey.

The obvious comparison here is to the Stocks and Shares ISA. How might this stock market investing account have got on? With a global tracker fund (kind of like simulating owning a piece of all stocks worldwide) the return was £4,271 – much higher than both inflation and the Cash ISA.

While there are no guarantees with this type of account – stocks go down as well as up – there is also the chance to beat the average return.

Another option

One popular approach is to add investment funds to a Stocks and Shares ISA. These offer the diversification of a tracker or index fund but can be more specialised on a sector, country, or type of investment. One that I own and think may be worth considering is Scottish Mortgage Investment Trust (LSE: SMT), which specialises in exciting growth companies.

Over the years, the fund has picked huge winners like Nvidia and Tesla ahead of time. Its most intriguing holding today is perhaps SpaceX, which is set to IPO in a couple of months. This fund also offers the chance to invest in private companies not on the markets, such as the aforementioned SpaceX and TikTok-owner ByteDance.

It’s worth saying that tech has had a particularly good run in the last 10 to 15 years. A slowdown in the sector or a downturn in the global economy could make this fund not such a great investment in the years to come.

But comparing its performance over the above 1999 to 2024 timeframe shows how good a track record it has. A £1,000 stake would have turned into £10,214. That’s one more reason a Stocks and Shares ISA may be worth thinking about compared to a Cash ISA.

The post £1,000 invested in a Cash ISA in 1999 is now worth… appeared first on The Twelfth Magpie.

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John Fieldsend has positions in Scottish Mortgage Investment Trust Plc and Tesla. The Motley Fool UK has recommended Nvidia and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I’ve been keeping a close eye on International Consolidated Airlines Group (LSE: IAG) shares of late. The conflict in Iran has affected most airlines and the owner of British Airways, known as IAG, is no exception – the share price fell 25% in less than a month! But the huge drop has also made the stock one of the cheapest-looking on the FTSE 100 with a price-to-earnings ratio of six at its lowest.

Am I looking at a brilliant bargain here? Or is the sell-off justified? One possible answer came in the last week when there was another twist in the tale…

Why the big news?

What happened? In short, IAG announced ticket price hikes were on their way. The elevated cost of jet fuel has persisted and the hedging of these costs can only protect airlines for so long. They’re running out of runway, so to speak.

Why is this big news? Well, it’s a strong sign that this whole episode is not going to just blow over. And when prices get raised, consumer behaviour often changes. How many passengers are going to opt for a domestic holiday or a lower-cost airline as a result? Lower demand for aeroplane tickets is a real risk for the company.

The conflict has already had meaningful changes to airlines. The early data suggests folks are avoiding far-flung destinations – the Middle East being a central hub to Asia and Australasia. That’s not even mentioning the cancellations to big travel destinations like Dubai.

It’s worth pointing out that this is coming just as airlines were starting to recover from the pandemic. COVID-19 took a wrecking ball to the sector. Inflation and a cost-of-living crisis came shortly after. Now 2026 has brought yet more woe.

All sounds pretty bad, right? Well, maybe not...

Is it a buy?

While there is a fair bit of doom-mongering about the possible problems on the horizon, there is nothing concrete to say operations will be massively impacted. For one, the latest forecasts suggest earnings and revenue are going to keep rising in the years ahead. And while no one can predict the eventual outcome of the current Middle East issues, a swift resolution is not outside the bounds of possibility.

And if the prognosis is indeed good, then it’s hard to look at this as anything other than a bargain. As mentioned, IAG is trading at just six times earnings – around a third of the FTSE 100 average. That means every share that is bought comes with around three times more profit than a typical Footsie stock. Buying cheap is at the heart of Warren Buffett’s ‘value investing’ approach. I think it worked out well for him.

The last word? There are real risks here but there is an opportunity too. I think IAG shares are worth considering.

The post Time to buy IAG shares now they’re down 19% and trading at just 6 times earnings? appeared first on The Twelfth Magpie.

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John Fieldsend has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

On 5 September last year, I posted an article here on The Motley Fool titled, “Up 81% in 2025 — should I buy this UK tech stock before it enters the FTSE 250?” The tech stock in question is Filtronic (LSE: FTC).

The exciting communications manufacturer had just signed a deal with SpaceX to supply equipment for the firm’s rockets. The stock was surging. The growth story looked compelling. I took the plunge and opened a position. What has happened since? It looks like I made a pretty good decision…

Double up

In the eight months since that article, the Filtronic share price has doubled in value – up 120% at its peak, although it has retreated a touch since then. The market cap has soared to £651m, now larger than a couple of dozen FTSE 250 companies (it may join the index in the near future). A £10,000 stake is now worth £20,175.

All the while, I got a decisive answer to the opening question – yes, yes I should have bought that UK tech stock!

A share price doubling in less than a year is a pretty rare event. So what happened? In short, we can call it the ‘SpaceX effect’.

Filtronic works closely with SpaceX, receiving two massive orders in the last year alone. The American giant also holds something like 10% of the equity in the British firm – a sign that this is a partnership that is here for the long run.

What has been lifting up both companies is the hype around the nascent ‘space industry’ and the upcoming blockbuster IPO. When SpaceX has a public offering later this year, it is expected to be valued at $2trn or thereabouts.

While the 100% gain has been nice to watch rising in my portfolio, I will say that us longtime investors know that there will always be winners and losers. I was not looking to double up as quickly as possible and sell. I’m interested in investing in great companies that can be financially rewarding over decades. And with that in mind, I think Filtronic could still be a good buy today…

Is it a buy today?

Much of the potential with Filtronic is tied up in the success of the space industry at large. We have seen applications for taking things to orbit already such as Starlink. And BAE Systems has just released a new spacecraft for space defence too. If the use cases continue to grow then the valuable technology Filtronic provides could as well.

The risks are that this is a new industry and valuations are sky high. Filtronic now has a price-to-earnings ratio of 71 – making it one of the most expensive stocks on that metric across the whole FTSE 350. To take another example, SpaceX is aiming for a market cap of $2trn with a purported revenue of $16bn and earnings of $8bn. Pricey stuff.

My view? I’m not focusing on a time period as short as the past eight months. I think the company makes good products that are needed in a growing industry. I like its prospects over the long term and think it’s worth considering today.

The post £10,000 invested in Filtronic stock 8 months ago is now worth… appeared first on The Twelfth Magpie.

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John Fieldsend has positions in BAE Systems and Filtronic Plc. The Motley Fool UK has recommended BAE Systems and Filtronic Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Many look at the shifting billions in government defence budgets as the primary reason for the rise in BAE Systems (LSE: BA.) shares. And I can hardly argue. The rise of the share price – up 303% in five years – has a lot to do with massive changes in military spending.

But the reason this company has been able to really take advantage is simple – because they make some of the best stuff going. Be it fighters jets, submarines, or cybersecurity, BAE Systems is on the cutting edge of the latest technology. And that’s why the recent announcement of the Ascent spacecraft line intrigued me. Could a foray into the nascent field of space defence send the stock soaring even higher?

What is Ascent?

So what exactly is this new piece of kit? Essentially, it’s a vehicle for delivering payload to space. This could be putting small satellites into orbit where they can be used for military purposes. It can also be used for shifting satellites between orbits. The long-term goal is to be able to take stuff to and bring stuff back from the moon.

Perhaps the best way to explain the importance of this kind of application is through the conflict in Ukraine. Starlink technology has been vital to operations in the war. Coordinating satellite information with high-tech drones is valuable to both sides. The recent blocking of all Starlink devices on the Russian side has severely hampered activities on that end. The last few years have shown how important the dynamic use of these kinds of technology is in modern warfare.

It’s worth pointing out at this stage that investors may not feel comfortable here. This is a company that makes a profit from producing and selling weapons. I think it’s understandable for anyone to have any qualms about this as an investment decision.

Is the stock a buy?

How much impact could this have on the company? Well, it’s still in the early stages. No numbers are being thrown around just yet. The firm expects to release the ‘test version’ of the Ascent spacecraft in 2027, however, so it’s not too long to wait. It’s also worth bearing in mind that a growth story can affect a company’s share price long before the money starts rolling in. Just look at the change in Rolls-Royce shares along with the developments in its SMRs (small nuclear power plants) for evidence of that.

And I think all BAE Systems shareholders will like the move towards the growing space industry. Later this year, the IPO of SpaceX will take place with a valuation of $2trn. I think that shows just how big this sector could become. It’s perhaps also encouraging that as well as the Military Space division, BAE Systems has a Civil Space division for non-defence applications.

To sum up? The announcement of these new Ascent spacecraft could end up as one of those small announcements that is a sign of a big impact over the long run. I think the stock is worth considering.

The post Will BAE Systems shares soar with its foray into the ‘space industry’? appeared first on The Twelfth Magpie.

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John Fieldsend has positions in BAE Systems and Rolls-Royce Plc. The Motley Fool UK has recommended BAE Systems and Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.