(Bloomberg) — BAE Systems Plc (BAESY) shares fell the most in two years as Bank of America Corp. analysts downgraded the British defense-equipment manufacturer due to the risk of potential US government spending cuts overseen by Elon Musk.

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The stock fell as much as 5.9% as a BofA team led by Benjamin Heelan cut BAE’s rating to underperform from neutral. The sell-equivalent recommendation is a contrarian call as only two other brokers have negative recommendations among 22 tracked by Bloomberg.

“We see growing uncertainty around the impact of the Department of Government Efficiency on the US budget,” BofA wrote. “DOGE could result in contract changes.”

The US is BAE’s biggest market, accounting for £10.7 billion ($13.6 billion) in sales during fiscal 2023, about 46% of group revenue.

President-elect Donald Trump has said Musk will run DOGE, named in homage to the Tesla Inc. (TSLA) billionaire’s favorite cryptocurrency. Musk has targeted $2 trillion in spending cuts.

BAE and other European defense stocks have rallied since early 2022, following the outbreak of conflicts in Ukraine and the Middle East. The UK-listed company is priced at 16 times earnings expected in a year’s time, a premium of 33% over its long-term average.

BofA also downgraded smaller UK defense company QinetiQ Group Plc to underperform due to its US exposure. The shares slumped as much as 5.1%.

—With assistance from Michael Msika.

(Updates shares.)

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