We expect U.K.-based aerospace and defense group BAE Systems PLC?s (BAE) top-line to continue to increase in 2025 and 2026, with profitability to remain steady and free cash flow generation to remain sustainably positive, supporting improving credit metrics. This follows a strong 2024, with healthy order backlogs and intake supporting BAE?s growth. As a result, we expect that adjusted debt to EBITDA will be 1.5x-2.0x in the next two years, with funds from operations (FFO) to debt increasing from 2024 levels to about 45%-55% in 2025-2026. Free operating cash flow (FOCF) should be more than £4 billion cumulatively over the two years, and BAE should be able to comfortably fund bolt-on mergers and acquisitions (M&A), a progressive dividend policy, and
