Babcock International Group (BAB)

Sector:

Defense and Aeronautics

Index:

FTSE 250

341.60p
   
  • Change Today:
    -3.50p
  • 52 Week High: 380.20p
  • 52 Week Low: 199.00p
  • Currency: UK Pounds
  • Shares Issued: 505.60m
  • Volume: 148,501
  • Market Cap: £1,727.12m
  • RiskGrade: 290
  • Beta: 0.00

JPM ups Babcock target price and backs turnaround

By Sean Farrell

Date: Tuesday 10 Aug 2021

LONDON (ShareCast) - (Sharecast News) - JP Morgan backed Babcock International's turnaround plan as the bank increased its target price for the engineering group's shares.
The new management team's disposals plan will strengthen the balance sheet and refocus the group on defence, aerospace and security, JP Morgan said. Babcock intends to sell about five businesses to raise more than £400m over the next 12 months.

That figure is cash value but the enterprise value will be higher because some sales will have lease liabilities attached, the bank said. If sales are held up the company has arranged a rolling £300m debt facility and negotiated an increase in its covenant. The disposals should reduce net debt to 2.5 times earnings.

The bank increased its target price for Babcock shares to 400p from 350p, giving potential for about 40% potential return over two years. Babcock shares rose 3.5% to 297.2p at 13:35 BST.

Chief Executive David Lockwood says Babcock's earnings margin can strengthen to about 9% in the medium term from 5.6% at the end of March 2021. The passing of Covid-19's impact, cost cuts and disposals will contribute to the increase, JP Morgan analyst David Perry wrote in a note to clients.

Babcock wants to bring year-end net debt and average net debt back into line by scrapping the practice of squeezing working capital at the year end. It will take the hit upfront over two years, creating near-term pain for long-term gain, Perry said.



Email this article to a friend

or share it with one of these popular networks:


Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

BAB Market Data

Currency UK Pounds
Share Price 341.60p
Change Today -3.50p
% Change -1.01 %
52 Week High 380.20p
52 Week Low 199.00p
Volume 148,501
Shares Issued 505.60m
Market Cap £1,727.12m
Beta 0.00
RiskGrade 290

BAB Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
75.22% below the market average75.22% below the market average75.22% below the market average75.22% below the market average75.22% below the market average
71.43% below the sector average71.43% below the sector average71.43% below the sector average71.43% below the sector average71.43% below the sector average
Price Trend
36.53% above the market average36.53% above the market average36.53% above the market average36.53% above the market average36.53% above the market average
23.08% above the sector average23.08% above the sector average23.08% above the sector average23.08% above the sector average23.08% above the sector average
Income
63.29% below the market average63.29% below the market average63.29% below the market average63.29% below the market average63.29% below the market average
40% below the sector average40% below the sector average40% below the sector average40% below the sector average40% below the sector average
Growth
48.56% below the market average48.56% below the market average48.56% below the market average48.56% below the market average48.56% below the market average
57.14% below the sector average57.14% below the sector average57.14% below the sector average57.14% below the sector average57.14% below the sector average

What The Brokers Say

Strong Buy 5
Buy 0
Neutral 4
Sell 0
Strong Sell 1
Total 10
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

BAB Dividends

  Latest Previous
  Interim Final
Ex-Div 05-Dec-19 04-Jul-19
Paid 17-Jan-20 09-Aug-19
Amount 7.20p 22.90p

Trades for 18-Jan-2022

Time Volume / Share Price
12:52 9 @ 341.80p
12:50 300 @ 341.71p
12:47 276 @ 341.60p
12:46 686 @ 341.40p
12:46 394 @ 341.40p

BAB Key Personnel

Chair Ruth Cairnie
CEO David Lockwood
CFO David Mellors

Top of Page