The best outcome from that meeting would be a signed LOI. We know that Canada felt it did not really get what it wanted out of the F-35 industrial partnership, while Saab is allegedly offering 10,000 jobs to Ottawa. Canada seems to be seriously considering Gripen. But let’s not lock ourselves into wishful thinking.
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Hello investors! There were two small but strategically interesting news from Saab in recent days. Here is our short take:
- Saab, Boeing, and BAE Systems have signed a Letter of Intent to offer a full-stack T-7A-based training system to the RAF (Royal Air Force), pairing the existing T-7A Red Hawk platform and its digital design heritage with a UK-based final assembly line and domestic industrial ecosystem led by BAE. The move is a logical next step in the T-7 cooperation rather than a surprise, and it ties Saab’s Aeronautics business more tightly into UK and transatlantic air combat and training networks as the UK looks to replace its aging Hawk fleet under the 2025 Strategic Defence Review. For Saab, the Letter of Intent is a strategically positive piece of long-term optionality in advanced jet training and blended live synthetic training environments, but it is a campaign framework rather than a firm order, with unknown volumes, timing, and pricing, so it has no immediate impact on the order book, financials, or our estimates.
Press release: Saab, Boeing and BAE Systems to collaborate on Next-Gen pilot training
- Saab has invested 10 MUSD in Swedish space company Pythom, taking the lead role in its latest funding round and adding another small brick to its long-term technology portfolio. The ticket is financially insignificant relative to our 2025 revenue estimate of ~76 BSEK and does not move our estimates or stance on the share, but it is strategically consistent with Saab’s pattern of targeted investments in emerging domains such as AI, autonomy, and now space. Pythom’s focus on light, rapidly deployable, and cost-efficient launchers fits Saab’s ambition to close capability gaps in the space domain, strengthen Swedish and allied space capacity, and position itself for growing space-related defense demand, while keeping balance sheet risk low and buying optionality in a fast-developing ecosystem.
Press release: Saab invests in space technology company Pythom - Inderes
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“We are campaigning, and we have given them offers,” Saab CEO Micael Johansson told Reuters in an interview.
Risteilyohjusten ja muiden pitkänkantaman järjestelmien alati lisääntyvä käyttö lisää tarvetta tämän tyyppisille ratkaisuille.
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Hello defense sector followers and investors!
Saab received an order of ~2.1 BSEK from FMV for LSS Lv and Giraffe 1X. It is another step in Sweden’s gradual build out of brigade level ground-based air defense, showing how earlier ground-based air defense and Giraffe 1X purchases are being expanded into a more complete formation level solution rather than remaining one-off purchases. For Surveillance, it is a solid domestic sensor and C2 reference that sits alongside recent Giraffe 1X and MSHORAD wins in Sweden and export markets, but at ~1% of our 2027 revenue estimate it is best seen as a supportive data point for the order book (so far in 2025 at ~130 BSEK) and for policy driven demand in Saab’s radar and command-and-control portfolio rather than a thesis changing contract.
The press release: Saab receives order for ground-based air defence solution from Sweden - Inderes
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Poland orders three A26 submarines from Sweden, agreement to be signed next year
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Great big deals recently. Fighters, submarines and other nice things. The stock price reacted (in my opinion) very cautiously, even though such news is investors’ wet dreams.
This has been tried to explain to me too. It’s expensive. P/E is ugly etc. Still. Well, let’s stay on board and (maybe) buy more.
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Typically, these processes take a while, and those following the industry know about the projects and the most likely competitors.
But not everything is necessarily priced in yet. One interesting speculation I read about is NATO’s need to modernize its AWACS aircraft. The E-7 Wedgetail, previously considered a likely option, has dropped out of this, partly due to a lack of US support for that E-7 aircraft. For Saab, this is an opportunity, because the probability of Saab’s Globaleye aircraft getting into that NATO project increased significantly.
But then one can reasonably ask why the United States isn’t acquiring those E-7 AWACS aircraft for itself? Well, because they apparently meet the need with satellites. So, is it also possible that NATO will opt for a similar solution?
(https://themerge.co/p/decoys)
That Merge is actually a good source to follow these various opportunities worldwide. That newsletter also mentions other opportunities for Saab’s GlobalEye. Usually, competitors for various projects are well-known, and thus all of this is already priced into the stock.
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No GlobalEye deal comes as a surprise, as in many cases the selection decision is known/guessed long before, e.g., France. So they are more or less priced in (except, of course, at Inderes).
Ukraine’s future aircraft are not yet priced in, because frozen assets have not yet been unlocked, meaning the main funding is missing. Presumably Canada is also missing (from the pricing), because they are not in a “must-have” situation regarding fighter jets like Ukraine. However, several orders for GlobalEye are expected within a year.
France has possibly linked Sweden’s new warships and airborne surveillance aircraft:
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The recent media noise around the defense sector shows how easily headlines and rumors can shift prices in the short-term, sometimes far more than any change in fundamentals would warrant.
Consensus already expects robust backlog growth and better execution across the sector, and current valuations already discount (price in) a meaningful part of that. The key issue is not whether the cycle is in the price, but how many years of elevated growth, margins, and cash conversion the market has pulled forward for each name. Our view is that the market is most likely overestimating this in names with high exposure to short-cycle ground combat portfolios and sensor-heavy product sets (Saab included) where recent earnings upgrades and war sensitivity have pushed multiples to levels that are hard to reconcile with the underlying procurement paths.
Contract news and geopolitical headlines still create entry and exit points because they can move both sentiment and fundamentals, but the short-term impact on intrinsic value is usually difficult to gauge. Price discovery when fundamentals change, and how that feeds through to intrinsic value, is objectively a gradual process, so short-term price moves do not necessarily give a reliable picture. As an illustration, a defense company announcing a 7 BUSD order on a backlog of similar size could see its share price jump 5-10% (maybe more), depending on how well the market understands the company’s economics or the general hype around it. In simple terms, the order increases revenue visibility because the company can run its factories at higher utilization for longer, but the value impact still depends on capacity, margins, investment needs, and execution risk. If the company faces capacity constraints or must invest heavily to deliver, the market’s initial reaction can easily overshoot what the order is worth in discounted cash flow terms. Sharp short-term moves like that only make sense relative to a long-term valuation anchor that assumes multiples revert toward more sustainable levels as growth from the upcycle slows. Without that anchor, trading on news flow is effectively gambling.
This does not imply that a sector must revert to its historical valuation levels, but history provides context on where valuations could settle under different scenarios. We also need to understand whether a business today is structurally different from its past and how that should affect the way the market values it. The market’s “not knowing for sure” can just as well mean that current prices reflect a mistaken view of duration or profitability that will eventually be corrected.
Two examples of investors:
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Price driven investors say: “The share price is down this month, that must be a good entry point.”
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Anchor driven investors say: “The share price is down this month. How does that compare with our view of fair value?”
Both may be right on a given trade, but only one wins in the long run. You want your expectations to be right for the right reasons, not because you got lucky once or twice. We want to avoid the overconfidence bias, because it turns any investor into a ticking bomb in the markets.
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According to this article, Saab got badly beaten compared to the F-35. Not good, no.
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Interesting read. It certainly makes one wonder. In our view, the choice between Gripen and F-35 for Canada may presented as a technical capability decision, but the evaluation itself is shaped by political choices about alliances, industrial policy and threat scenarios. Also, the scoring framework may be described as reflecting only threat scenarios and capability needs, yet a different set of political priorities could still make Gripen the better strategic option for Canada. In practice, the choice is a political one between a platform that best serves the integrated US led alliance model and a platform that prioritizes Canadian industrial autonomy and alternative partnerships, even if both can be justified on “technical” grounds. While Ottawa is currently committed to an 88 aircraft F-35 fleet, the ongoing Saab-Bombardier talks and unease over F-35 costs mean that a future mixed fleet in which Canada adds a smaller number of Gripen aircraft remains a plausible political and industrial scenario.
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Saab is staying active, as expected. Q4 is seasonally strong in orders and deliveries, and the company continues to fill its European order book, much to the market’s delight.
On Monday, Saab announced a third MSHORAD (Mobile Short-Range Air Defense) battery for Lithuania, a ~1.4 BSEK order for deliveries in 2026-30. The system combines Giraffe 1X radar and RBS 70 NG effectors on Oshkosh JLTVs (Joint Light Tactical Vehicles), plugging into its GBAD (ground-based air defense) C2 (command and control) architecture, providing the Lithuanian Army with more mobile, networkable short-range air defense capacity. Fundamentally, the contract is small against Dynamics’ ~90 BSEK backlog and ~18 BSEK LTM revenue. However, it is another data point that Saab’s short-range air defense offering is competitive and that Baltic needs for ground-based air defense are translating into real orders. We keep our estimates unchanged, but see the order as supportive for Dynamics’ medium-term growth case and for Saab’s ability to convert the current security environment into a thicker, more diversified backlog.
Today, Saab also announced its first live training order from the Spanish Army under a framework agreement with a maximum value of ~34 MEUR (~400 MSEK). The initial contract covers Individual Duel Simulation systems from its GAMER (Gunnery & Maneuver Exercise) family, delivered with local partner Tecnobit. Financially, this is small for Dynamics and even smaller in a group context than the Lithuanian MSHORAD deal, given its ~72 BSEK LTM revenue and ~200 BSEK backlog; it does not move our estimates. Strategically, however, Spain is a useful reference customer for Dynamics’ Training and Simulation business, as the systems can scale from small unit training to larger multinational exercises, strengthening Saab’s position in European land forces’ training infrastructure.
In addition to recent larger developments in Kockums and Aeronautics, these two contracts exemplify how Saab adds smaller, recurring pieces to a growing European defense footprint, even when headline numbers are not large enough to distinctly affect fundamentals on their own.
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Saab just landed a real EW win in Germany, and the AI angle is not marketing fluff
Saab has received two orders from Airbus Defence and Space for the Arexis Electronic Warfare sensor suite for Germany’s Eurofighter program, with a total value of ~549 MEUR and deliveries planned for 2025 to 2028. The split matters: 291 MEUR was booked immediately, and this second order of ~258 MEUR includes AI technology from Saab and its strategic partner Helsing. Importantly, that approval condition is now cleared, so the 258 MEUR is booked as order intake in Q4 2025.
Saab reported 2024 revenue just shy of 64 BSEK. For 2025, the outlook is 20-24% organic revenue growth, which implies a rough 2025 revenue base of:
64 BSEK*1.20 = 76.8 BSEK
64 BSEK*1.24 = 79.4 BSEK
Conservatively, 258 MEUR *~SEK 11-12 per EUR = ~2.8-3.1BSEK. That is ~3.5-4.0% of the implied 2025 revenue base. With that said, this is not the type of order for which revenue is recognized over one year; rather, it is delivered over multiple years.
Why this matters, you ask? Arexis is a high-end electronic warfare sensor suite for Germany’s Eurofighter program, the kind of capability that is authority approval sensitive and hard to replicate quickly at scale. It also lands while Saab is still scaling operations and investing in capacity ramp up, including supplier ramp ups, which points to a tight production environment rather than slack. Adding Helsing’s AI into Arexis over the next three years signals a shift toward more software-driven EW (which is already a sector base case), where faster detection, classification, and countermeasure updates improve electronic attack and self-protection as threats evolve.
What could still bite: integration and certification risk, schedule risk, and margin risk if execution drags. Also, this is Airbus as prime, so Saab’s economics are great but not fully in its own hands.
What we will watch next: disclosure on delivery phasing, any follow on tranches for the Eurofighter EW variant, and whether Saab starts to describe the AI enabled EW content as a reusable product platform rather than a one off integration. However, this order specifically is so small that we won’t put much effort into digging into it.
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A few days ago, Saab received a small order for a platform from its Surveillance division. It is a useful datapoint, but not an estimate mover. The same day, FMV also came in with a ~2.5 BSEK order for the further development of the Gripen system, but I will cover that in a separate post to avoid one large, dense read.
The order: Saab received a ~130 MEUR order for Sirius passive SIGINT and surveillance, including services, from a European NATO country, with deliveries until 2030.
Context: Saab’s order backlog was 202.4 BSEK at end of Q3 2025.
Inference: At ~1.4 BSEK, this is ~0.7% of backlog (1.4 / 202.4). That is why we treat it as momentum confirmation for Surveillance, not a group level estimate changer.
What was actually ordered? Sirius is a passive sensor system for SIGINT, signals intelligence, used to build surveillance and intelligence capability without broadcasting your own position. For example, a unit near the front line can set up Sirius to listen for enemy radio and radar signals, figure out where they are coming from, and warn friendly forces while staying silent itself, so it is harder for the enemy to find and target the unit.
Inference: 1) This fits the next phase of European procurement, moving from urgent replenishment toward ISR and EW enablement, the nervous system that makes platforms and fires more effective. 2) The to 2030 delivery profile mainly adds visibility and workload stability, with limited near term revenue uplift.
What to watch next: 1) More Surveillance and EW orders with services and integration content. 2) Any color on delivery phasing and program context in coming reporting. That said, the order is minor relative to both backlog and revenue, so we do not follow it in depth. We still log smaller orders to keep them in context.
Press release: “Saab receives order for signals intelligence and surveillance solution.”
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Saab Aeronautics receives small order from the FMV.
The takeaway: Saab right before the weekend received ~2.5 BSEK from the FMV for Gripen development resources covering 2026-28. This is the plumbing that keeps Gripen upgradeable. It supports long term competitiveness, but it is not an estimate mover at group level.
What was ordered in plain English:
FMV is paying for the tools and test capacity that let Saab add new capabilities safely and fast.
- Operation and support of test aircraft: It is our understanding that Saab keeps a few Gripen aircraft as flying test labs. They are used to try new software and new system setups before anything is rolled out broadly.
- Rigs and simulators:
- A rig is a ground based setup where real aircraft systems are connected so engineers can test upgrades in a controlled environment.
- A simulator is a realistic cockpit and system environment where pilots and engineers can test functions and scenarios that are too risky or impractical to do in the air.
- Verification and validation:
- Verification is proving the new software mode does exactly what the spec says across test cases.
- Validation is proving that mode actually helps a pilot find, track, or survive better in the real mission context.
- New capability development is then the output of this whole pipeline: new software functions, new sensor features, and new integrations, introduced through a controlled pipeline so Gripen can keep up as threats evolve. This is exactly how Saab describes the purpose of the order.
Numerical context:
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~2.5 BSEK over 3 years implies ~0.8 BSEK per year.
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Saab’s group order backlog was 202.4 BSEK at end Q3 2025, so this is ~1.2% of group backlog.
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Aeronautics order backlog was ~44.7 BSEK at end Q3 2025, so it is more visible inside the division.
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On our estimates, the annual run rate is less than ~1% of 2026e group revenue, so it does not change the estimates.
Perspective:
Why this matters, you ask? Modern combat aircraft compete on sensors, software, and how fast you can integrate and validate upgrades, not only the airframe. This contract funds the test and validation machinery that makes future upgrades real, not marketing, and it reinforces FMV’s long term reliance on Saab’s engineering ecosystem.
On the upgradability note, a leaked Canadian evaluation table reportedly scored “upgradability” F-35 100% vs Gripen 28% with a 28% weight. That is a notable datapoint, but the underlying scoring method is not public, so I would not over-interpret it. The safer conclusion is that “upgradability” can be defined very differently depending on the customer, but it is still an important topic as the battlefield is continuously evolving.
What to watch next: 1) Follow on FMV awards that move from “development support” into concrete capability adds with clearer delivery and margin profile. 2) Any disclosure on mix and profitability in Aeronautics, since support work can be steady but not necessarily high margin.
Press release: “Saab receives order for development resources for Gripen.”
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Here are Renato’s comments on Saab’s orders. 
Saab reported a Q4 order intake of approximately SEK 70 billion, dominated by long-cycle programs, particularly the Gripen for Colombia and the A26 submarine phase, all of which improve visibility more than they boost short-term revenue. With demand remaining strong, the year 2026 shifts the focus from orders to deliveries, meaning that industrial capacity and execution will dictate the pace. In our view, the order flow reinforces medium-term confidence without, however, forcing immediate increases to the 2026 forecasts.
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I have been following US and Canadian channels for a while with SAAB in mind. The mutual posturing between the countries in the tariff war has also strongly suggested that Canada might cancel its F35 fighter jet order and choose Gripens instead. Gripens are very quick to get mission-ready in Arctic conditions and are reliable in the cold. Claims: The F35 requires about two hours of preparation before flight. Also, the cost per flight hour for the F35 is significantly higher compared to the Gripen. Someone can surely weigh in on these and Canada’s potential Gripen order.
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Finland recently compared the F-35 and the Gripen in its HX project. An article in Iltasanomat from 2021 reports on this.
The Defense Forces have indeed pushed the matter to the absolute limits in their tests, and the F-35 emerged as the winner based on the overall package.
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Good link. The price for Finland’s order has, of course, already risen significantly from that. If a little speculation is allowed, the F-35 and Gripen fighters would complement each other well in Finland, too. The Gripen as an agile and fast first-response aircraft, and the F-35 as the actual comprehensive operations aircraft. Perhaps the climate will warm up too, and the latter’s reported cold-weather issues will improve.
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Swedish defense technology company Saab reports that it has received an order from the Lithuanian Ministry of National Defence for the company’s RBS 70 Bolide missiles. The value of the order is three billion Swedish kronor, or approximately 280 million euros.
On Tuesday, Saab announced it had signed an agreement with the French defense procurement agency, Direction générale de l’Armement (DGA), and received an order for two GlobalEye Early Warning and Control (AEW&C) surveillance aircraft.
The order also includes ground stations, training, and support services, and is valued at approximately 1.1 billion euros. Saab’s shares rose 2.7 percent on the Stockholm Stock Exchange on Tuesday.
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