Babcock International Group PLC

LSE:BAB Stock Report

Mkt Cap: UK£1.5b

We’ve recently updated our valuation analysis.

Babcock International Group Valuation

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

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

BAB key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.6x
Enterprise Value/EBITDA10x
PEG Ratio0.9x

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for BAB vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average21.9x
QQ. QinetiQ Group
10.9x-0.5%UK£2.0b
CHG Chemring Group
16.6x6.3%UK£785.5m
SNR Senior
41x29.2%UK£603.4m
CHRT Cohort
19.3x0.1%UK£212.6m
BAB Babcock International Group
10.5x11.2%UK£1.5b

Price-To-Earnings vs Peers: BAB is good value based on its Price-To-Earnings Ratio (10.5x) compared to the peer average (21.9x).


Price to Earnings Ratio vs Industry

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

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a12.6%
n/an/an/a

Price-To-Earnings vs Industry: BAB is good value based on its Price-To-Earnings Ratio (10.5x) compared to the European Aerospace & Defense industry average (22.9x)


Price to Earnings Ratio vs Fair Ratio

What is BAB'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.

BAB PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio10.5x
Fair PE Ratio18.2x

Price-To-Earnings vs Fair Ratio: BAB is good value based on its Price-To-Earnings Ratio (10.5x) compared to the estimated Fair Price-To-Earnings Ratio (18.2x).


Share Price vs Fair Value

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

Below Fair Value: BAB (£3.06) is trading below our estimate of fair value (£3.87)

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


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 BAB forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£3.06
UK£4.02
+31.2%
12.3%UK£4.75UK£3.25n/a11
Jan ’24UK£2.82
UK£4.02
+42.3%
12.3%UK£4.75UK£3.25n/a11
Dec ’23UK£2.95
UK£4.02
+36.1%
12.3%UK£4.75UK£3.25n/a11
Nov ’23UK£2.80
UK£4.03
+43.7%
14.1%UK£5.10UK£3.25n/a10
Oct ’23UK£2.79
UK£4.23
+51.7%
13.3%UK£5.10UK£3.25n/a10
Sep ’23UK£3.16
UK£4.23
+33.5%
13.3%UK£5.10UK£3.25n/a10
Aug ’23UK£3.51
UK£4.09
+16.4%
15.4%UK£5.10UK£3.14n/a10
Jul ’23UK£3.18
UK£4.04
+27.0%
14.9%UK£5.00UK£3.14n/a10
Jun ’23UK£3.50
UK£4.04
+15.4%
14.9%UK£5.00UK£3.14n/a10
May ’23UK£3.06
UK£4.04
+31.9%
14.9%UK£5.00UK£3.14n/a10
Apr ’23UK£3.23
UK£4.04
+24.9%
14.9%UK£5.00UK£3.14n/a10
Mar ’23UK£3.31
UK£3.99
+20.8%
13.9%UK£5.00UK£3.14n/a11
Feb ’23UK£3.07
UK£3.89
+26.8%
13.5%UK£5.00UK£3.14n/a10
Jan ’23UK£3.19
UK£3.71
+16.5%
19.9%UK£5.00UK£2.00UK£2.8211
Dec ’22UK£3.03
UK£3.75
+23.9%
20.5%UK£5.00UK£2.00UK£2.9511
Nov ’22UK£3.25
UK£3.82
+17.3%
20.4%UK£5.00UK£2.00UK£2.8011
Oct ’22UK£3.68
UK£3.88
+5.6%
24.7%UK£6.00UK£2.00UK£2.7911
Sep ’22UK£3.65
UK£3.83
+4.9%
23.7%UK£6.00UK£2.00UK£3.1612
Aug ’22UK£2.56
UK£3.25
+27.0%
34.5%UK£6.00UK£1.45UK£3.5112
Jul ’22UK£2.90
UK£3.25
+12.1%
34.5%UK£6.00UK£1.45UK£3.1812
Jun ’22UK£2.99
UK£3.18
+6.6%
36.1%UK£6.00UK£1.45UK£3.5012
May ’22UK£2.88
UK£3.18
+10.5%
36.1%UK£6.00UK£1.45UK£3.0612
Apr ’22UK£2.37
UK£2.74
+15.6%
42.6%UK£6.00UK£1.45UK£3.2312
Mar ’22UK£2.66
UK£2.73
+2.7%
42.8%UK£6.00UK£1.45UK£3.3112
Feb ’22UK£2.33
UK£2.74
+18.0%
42.6%UK£6.00UK£1.45UK£3.0712
Jan ’22UK£2.80
UK£3.48
+24.4%
25.3%UK£6.00UK£2.75UK£3.1913

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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