0828 GMT - U.K. defense groups such as BAE Systems, Melrose Industries and QinetiQ could take a hit if U.S. lawmakers enact President Trump's One Big Beautiful Bill Act, Citi analyst Charles Armitage says. The act, which has cleared the House of Representatives and is due to be voted at the Senate, includes a provision that could facilitate penalty taxes on foreign companies operating in the U.S. if their home country is deemed to have a "discriminatory" tax system. Armitage says much of the European Union and the U.K. will likely qualify. BAE Systems, with between 45% and 50% sales in the U.S. could suffer a 3% downside to earnings per share in the first year, rising to about 12% in the fourth year, assuming no mitigation occurs, he adds. BAE Systems trades up 1.5% at 19.47 pounds. (cristina.gallardo@wsj.com)
(END) Dow Jones Newswires
June 03, 2025 04:32 ET (08:32 GMT)
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