Babcock International Group PLC

LSE:BAB Stock Report

Market Cap: UK£2.6b

Babcock International Group Valuation

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

Valuation Score

2/6

Valuation Score 2/6

  • 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 BAB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: BAB (£5.28) is trading below our estimate of fair value (£7.16)

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


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/Revenue0.7x
Enterprise Value/EBITDA10.8x
PEG Ratio2.7x

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.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average23.8x
QQ. QinetiQ Group
18x10.7%UK£2.5b
CHG Chemring Group
32.8x22.8%UK£1.0b
SNR Senior
20.8x23.3%UK£646.8m
CHRT Cohort
23.7x9.8%UK£314.6m
BAB Babcock International Group
81.1x29.5%UK£2.7b

Price-To-Earnings vs Peers: BAB is expensive based on its Price-To-Earnings Ratio (81.1x) compared to the peer average (24x).


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/a18.9%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a18.9%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: BAB is expensive based on its Price-To-Earnings Ratio (81.1x) compared to the European Aerospace & Defense industry average (28.6x).


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 Ratio80.2x
Fair PE Ratio34.6x

Price-To-Earnings vs Fair Ratio: BAB is expensive based on its Price-To-Earnings Ratio (81.1x) compared to the estimated Fair Price-To-Earnings Ratio (34.6x).


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£5.22
UK£5.77
+10.6%
8.8%UK£6.46UK£5.04n/a10
Jun ’25UK£5.66
UK£5.60
-1.0%
10.5%UK£6.40UK£4.45n/a10
May ’25UK£5.09
UK£5.36
+5.5%
8.6%UK£6.30UK£4.45n/a10
Apr ’25UK£5.20
UK£5.36
+3.1%
8.6%UK£6.30UK£4.45n/a10
Mar ’25UK£5.04
UK£5.36
+6.4%
8.6%UK£6.30UK£4.45n/a10
Feb ’25UK£4.52
UK£5.15
+13.8%
10.9%UK£6.10UK£4.00n/a10
Jan ’25UK£3.95
UK£4.90
+24.0%
16.3%UK£6.10UK£3.25n/a10
Dec ’24UK£3.99
UK£4.85
+21.4%
15.1%UK£5.65UK£3.25n/a10
Nov ’24UK£3.94
UK£4.53
+14.9%
19.6%UK£5.81UK£3.25n/a10
Oct ’24UK£4.13
UK£4.47
+8.2%
19.0%UK£5.85UK£3.25n/a10
Sep ’24UK£3.89
UK£4.25
+9.2%
17.6%UK£5.55UK£3.25n/a10
Aug ’24UK£3.71
UK£4.26
+14.8%
16.8%UK£5.55UK£3.25n/a11
Jul ’24UK£2.83
UK£3.95
+39.7%
12.4%UK£4.60UK£3.25n/a10
Jun ’24UK£3.09
UK£3.95
+27.7%
12.4%UK£4.60UK£3.25UK£5.6610
May ’24UK£3.17
UK£3.97
+25.0%
12.4%UK£4.60UK£3.25UK£5.0910
Apr ’24UK£2.99
UK£3.99
+33.4%
13.0%UK£4.75UK£3.25UK£5.2010
Mar ’24UK£3.29
UK£4.01
+21.9%
12.9%UK£4.75UK£3.25UK£5.0410
Feb ’24UK£3.03
UK£4.02
+32.6%
12.3%UK£4.75UK£3.25UK£4.5211
Jan ’24UK£2.82
UK£4.02
+42.3%
12.3%UK£4.75UK£3.25UK£3.9511
Dec ’23UK£2.95
UK£4.02
+36.1%
12.3%UK£4.75UK£3.25UK£3.9911
Nov ’23UK£2.80
UK£4.03
+43.7%
14.1%UK£5.10UK£3.25UK£3.9410
Oct ’23UK£2.79
UK£4.23
+51.7%
13.3%UK£5.10UK£3.25UK£4.1310
Sep ’23UK£3.16
UK£4.23
+33.5%
13.3%UK£5.10UK£3.25UK£3.8910
Aug ’23UK£3.51
UK£4.09
+16.4%
15.4%UK£5.10UK£3.14UK£3.7110
Jul ’23UK£3.18
UK£4.04
+27.0%
14.9%UK£5.00UK£3.14UK£2.8310
Jun ’23UK£3.50
UK£4.04
+15.4%
14.9%UK£5.00UK£3.14UK£3.0910

Analyst Forecast: Target price is less than 20% higher than the current share price.


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