Saab: Scarce interceptors raise the value of GlobalEye

One of the key messages at the Munich Security Conference was that long-range air defense stockpiles are exhausted. We view these comments as potentially positive for GLSDB and modestly positive for Saab’s GlobalEye surveillance business, with the effect potentially adding ~1-2.5 BSEK of revenue in 2026, corresponding to a ~1-3% increase. The long-range deterrence gap supports our European sovereignty thesis underpinning Saab’s investment case, but it does not change our estimates.

Strategic Long-Range Interceptors Depleted

At the Munich Security Conference, Germany’s defense minister, Boris Pistorius, stated bluntly that “there is nothing left” in European inventories, while President Zelenskyy warned that one of the worst wartime messages is that air defense units are empty, meaning missiles are fired with no resupply. The stockpile crunch refers to scarce long-range ground-based air defense interceptors and the launchers and fire units needed to employ them, such as Patriot, IRIS-T SLM, and NASAMS. Saab has some ground-based longer-range exposure, for example, its Ground-Launched Small Diameter Bomb (GLSDB) developed with Boeing, but program level volumes, capacity and economics are not disclosed, so we treat any stockpile driven upside as directionally positive but not yet a base case driver.

From a strategic point of view, integrated and robust air defense requires both long-range and short-range deterrence. Therefore, Saab’s short-range portfolio, including the popular RBS 70, looks structurally supported by the shortage rather than substituted. However, the main risk is budget timing, not end demand. A near-term reallocation toward long-range interceptors and fire units could delay some short-range air defense orders. Rebuilding inventories will still take several years, which keeps the broader European air defense investment theme durable.

Interceptor scarcity can accelerate GlobalEye orders

Interceptor scarcity does not generate GlobalEye demand on its own. In our view, however, it can strengthen the business case by raising the marginal value of surveillance and command and control, leading to an acceleration in purchase decisions. Because interceptors are scarce and expensive, buyers have stronger incentives to improve threat-tracking quality, identification, and engagement decisions alongside building up interceptor stockpiles. This reduces wasted deterrence resources, increases mission effect per interceptor, and preserve magazines in a sustained air defense fight. 

On the other hand, not investing in air defense is not an option because it raises capital destruction and existential risk. Europe’s long-range deterrence gap is largely a legacy of underinvestment. That same starting point is why the sector is now in a long-term rearmament cycle, with greater budget and policy focus on layered air defense, which in our view, should accelerate the buildout of sensor and command and control systems and infrastructure.

Strategic upside, but capacity and budgets cap immediate financial impact

The European interceptor stockpile shortfall is, in our view, a strategic positive for Saab. Scarcity continues to push Europe toward policies that prefer European sourced supply and European control, which strengthens Saab’s regulatory moat and validates its sovereignty thesis. These dynamics are also supportive for the European defense broader sector, not just Saab. However, some demand might be allocated outside of Europe in the short-term due to capacity constraints.

Moreover, although there are many Surveillance contracts in the pipeline, no contracts have been signed yet, and we still see three frictions that slow the path from demand signals to orders to booked revenue. First, industrial agreements and supply chains must scale to the new demand run-rate. Second, fiscal constraints slow decision velocity as budget commitments lag. Third, procurement systems are stretched and only gradually adapting, which extends timelines and delays contract conversion.

Using some potential unit and order value ranges and the decision and delivery windows in the table below, we see a plausible upside of 1-3% to our 2026-30 revenue expectations, assuming contract awards occur early enough for Saab to start execution and secure long-lead items shortly after award. Beyond that, the impact becomes small versus the wider long-term growth drivers. That said, part of this upside also appears at least partly reflected in current market expectations.

Key catalysts we track are Poland’s GlobalEye decision, which we see as more likely in H2’26 with spill risk into 2027, Germany’s defense budget publication for 2027 later this year, and Q1’26 execution and order intake commentary.