Babcock International Group PLC

BATS-CHIXE:BABL Stock Report

Market Cap: UK£2.6b

Babcock International Group Valuation

Is BABL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of BABL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: BABL (£5.15) is trading below our estimate of fair value (£10.9)

Significantly Below Fair Value: BABL is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BABL?

Key metric: As BABL is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for BABL. This is calculated by dividing BABL's market cap by their current earnings.
What is BABL's PE Ratio?
PE Ratio13.4x
EarningsUK£192.50m
Market CapUK£2.58b

Price to Earnings Ratio vs Peers

How does BABL's PE Ratio compare to its peers?

The above table shows the PE ratio for BABL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average62.3x
QQ. QinetiQ Group
17.2x15.1%UK£2.4b
CHG Chemring Group
31.3x22.2%UK£974.7m
SNR Senior
19.3x31.5%UK£588.0m
AVON Avon Technologies
181.2x62.0%UK£428.9m
BABL Babcock International Group
13.4x14.2%UK£2.6b

Price-To-Earnings vs Peers: BABL is good value based on its Price-To-Earnings Ratio (13.4x) compared to the peer average (62.3x).

Price to Earnings Ratio vs Industry

How does BABL's PE Ratio compare vs other companies in the European Aerospace & Defense Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
No. of Companies8PE020406080100+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: BABL is good value based on its Price-To-Earnings Ratio (13.4x) compared to the European Aerospace & Defense industry average (24.6x).

Price to Earnings Ratio vs Fair Ratio

What is BABL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BABL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio13.4x
Fair PE Ratio20.7x

Price-To-Earnings vs Fair Ratio: BABL is good value based on its Price-To-Earnings Ratio (13.4x) compared to the estimated Fair Price-To-Earnings Ratio (20.7x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst BABL forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£5.15
UK£6.26
+21.7%
12.2%UK£7.50UK£4.90n/a9
Nov ’25UK£4.72
UK£6.09
+28.9%
10.6%UK£7.20UK£4.90n/a9
Oct ’25UK£4.73
UK£6.04
+27.8%
10.4%UK£7.20UK£4.90n/a10
Sep ’25UK£5.25
UK£6.05
+15.3%
9.1%UK£7.20UK£5.50n/a11
Aug ’25UK£5.24
UK£6.03
+15.2%
8.8%UK£7.20UK£5.50n/a11
Jul ’25UK£5.20
UK£5.76
+10.8%
8.4%UK£6.45UK£5.04n/a11
Jun ’25UK£5.69
UK£5.60
-1.5%
10.5%UK£6.40UK£4.45n/a10
May ’25UK£5.08
UK£5.36
+5.6%
8.6%UK£6.30UK£4.45n/a10
Apr ’25UK£5.26
UK£5.36
+2.1%
8.6%UK£6.30UK£4.45n/a10
Mar ’25UK£5.04
UK£5.36
+6.5%
8.6%UK£6.30UK£4.45n/a10
Feb ’25UK£4.52
UK£5.15
+14.0%
11.0%UK£6.10UK£4.00n/a10
Jan ’25UK£3.95
UK£4.90
+24.1%
16.4%UK£6.10UK£3.25n/a10
Dec ’24UK£3.98
UK£4.85
+21.8%
15.1%UK£5.65UK£3.25n/a10
Nov ’24UK£3.97
UK£4.53
+14.1%
19.6%UK£5.81UK£3.25UK£4.7210
Oct ’24UK£4.16
UK£4.47
+7.6%
19.0%UK£5.85UK£3.25UK£4.7310
Sep ’24UK£3.88
UK£4.25
+9.4%
17.6%UK£5.55UK£3.25UK£5.2510
Aug ’24UK£3.73
UK£4.26
+14.3%
16.8%UK£5.55UK£3.25UK£5.2411
Jul ’24UK£2.82
UK£3.95
+40.1%
12.4%UK£4.60UK£3.25UK£5.2010
Jun ’24UK£3.09
UK£3.95
+27.9%
12.4%UK£4.60UK£3.25UK£5.6910
May ’24UK£3.16
UK£3.97
+25.4%
12.4%UK£4.60UK£3.25UK£5.0810
Apr ’24UK£2.99
UK£3.99
+33.4%
13.0%UK£4.75UK£3.25UK£5.2610
Mar ’24UK£3.29
UK£4.01
+22.1%
12.9%UK£4.75UK£3.25UK£5.0410
Feb ’24UK£3.03
UK£4.02
+32.4%
12.3%UK£4.75UK£3.25UK£4.5211
Jan ’24UK£2.83
UK£4.02
+41.9%
12.3%UK£4.75UK£3.25UK£3.9511
Dec ’23UK£2.96
UK£4.02
+35.5%
12.3%UK£4.75UK£3.25UK£3.9811
Nov ’23UK£2.80
UK£4.03
+43.9%
14.1%UK£5.10UK£3.25UK£3.9710

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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