Update shared on 21 Nov 2025
Fair value Increased 1.91%Analysts have increased their price target for Babcock International Group to approximately £12.74 per share, up from £12.50. They cite modest improvements in revenue growth and profit margins as key drivers of the slight upward revision.
Analyst Commentary
Recent updates from major research firms reflect ongoing optimism regarding Babcock International Group's financial outlook. Price targets have been revised upward due to improved performance metrics and expectations for future growth.
Bullish Takeaways- Bullish analysts cite upgraded revenue projections and improving profit margins as key factors supporting higher price targets.
- There is continued confidence in Babcock's ability to execute on its strategic priorities, which has contributed to positive valuation adjustments.
- Recent increases in target prices, particularly by prominent firms such as JPMorgan, indicate a stronger belief in the company’s medium-term growth prospects.
- Positive ratings are being maintained as analysts see opportunities for margin expansion in core business segments.
- Bearish analysts note that while price targets have risen, the upgrades are incremental, which signals a degree of caution regarding further upside.
- Some analysts see potential risks around the company’s ability to maintain its growth momentum given competitive pressures within the sector.
- Concerns remain about the sustainability of margin improvements in a potentially challenging macroeconomic environment.
What's in the News
- Quest Global and Babcock expand their engineering services collaboration for the UK's Naval Nuclear Sector and Critical Infrastructure Programmes, with increased focus on upskilling and talent development in areas such as Naval Architecture and Electrical Power Distribution (Client Announcements).
- Babcock partners with Zeelo to launch MoveSmart, a sustainable shuttle service at the Devonport site. The service aims to reduce local congestion and enhance workforce commuting options with flexible, app-based solutions (Strategic Alliances).
- Babcock and Skyral sign an MoU to deliver advanced modelling and simulation tools for the British Army. This partnership supports supply chain planning, operational readiness, and modernisation with digital twin and simulation technologies (Strategic Alliances).
- Babcock and HII collaborate to integrate REMUS unmanned underwater vehicles with Babcock's submarine Weapon Handling and Launch Systems, advancing autonomous undersea capabilities for allied navies (Strategic Alliances).
- Babcock and Critical Infrastructure Technologies Ltd. agree to co-develop a deployable 5G communications and counter-drone platform for the Ukrainian Armed Forces. The agreement includes the supply of 50 Nexus 20 units and plans for further expansion across NATO's Eastern Flank (Strategic Alliances).
Valuation Changes
- Consensus Analyst Price Target has increased modestly from £12.50 to £12.74 per share.
- Discount Rate has fallen slightly from 8.21% to 8.08%.
- Revenue Growth estimate has risen incrementally from 4.57% to 4.60%.
- Net Profit Margin is up slightly, moving from 5.98% to 6.02%.
- Future P/E ratio estimate has edged down marginally from 24.47x to 24.36x.
Disclaimer
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