UBS European research names Rolls‑Royce and BAE Systems as top aerospace & defence picks amid heightened Middle‑East tensions.
Rolls‑Royce (Buy, PT 1,550p) offers ~40% upside, backed by tight wide‑body market and resilient long‑haul engine servicing demand.
BAE Systems (Buy, PT 2,600p) targets ~26% upside, with 43% US and 10% Gulf revenue exposure to defence spending surge.
UBS expects conflict‑driven oil price rise and inflation to be contained, viewing the picks as three‑to‑six‑month resilient investments.