Update shared on23 Sep 2025
Fair value Increased 5.34%Babcock International’s consensus price target has been raised to £12.50, as analysts cite upgrades to guidance, strong results, improved contract execution, and increased confidence in management and margins, despite some caution over the rapid share rally.
Analyst Commentary
- Upgrades to guidance and strong financial results have driven bullish analysts to raise price targets.
- Improved operational execution and delivery on key contracts are cited as reasons for optimism about future growth.
- Bullish analysts highlight the ongoing visibility and quality of Babcock’s order book.
- Citi's substantial target hike reflects improved margin expectations and confidence in management’s turnaround strategy.
- One bearish analyst expresses caution, noting the shares may have rallied too quickly and warrant a pause despite recent upgrades and solid results.
What's in the News
- Babcock and HII signed an MoU to integrate REMUS unmanned underwater vehicles with Babcock's submarine Weapon Handling and Launch Systems, targeting autonomous launch and recovery of UUVs via torpedo tubes for allied navies.
- Babcock and Skyral entered a strategic partnership to provide next-generation modelling and simulation capabilities for the British Army, developing a Supply Chain Planning Tool to enhance military asset management and readiness.
- Babcock and Critical Infrastructure Technologies agreed to co-develop deployable 5G, ISR, and counter-UAS platforms for the Ukrainian Armed Forces, with plans to deliver 50 Nexus 20 systems and potentially establish an Eastern European assembly hub.
- Babcock initiated a share repurchase program of up to £200 million to reduce shares in issue and impact future earnings per share, with board authorization for the plan.
- Babcock recommended a 30% increase in its total annual dividend, raising it to 6.5 pence per share.
Valuation Changes
Summary of Valuation Changes for Babcock International Group
- The Consensus Analyst Price Target has risen from £11.87 to £12.50.
- The Future P/E for Babcock International Group has risen from 23.01x to 24.47x.
- The Consensus Revenue Growth forecasts for Babcock International Group has risen slightly from 4.5% per annum to 4.6% per annum.
Disclaimer
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