Babcock International Group (BAB)

Sector:

Defense and Aeronautics

Index:

FTSE 250

323.70p
   
  • Change Today:
    -0.80p
  • 52 Week High: 380.20
  • 52 Week Low: 214.00
  • Currency: UK Pounds
  • Shares Issued: 505.60m
  • Volume: 258,495
  • Market Cap: £1,636.62m
  • RiskGrade: 290
  • Beta: 0.05

Baclays downgrades Babcock despite reduction in financial leverage

By Alexander Bueso

Date: Wednesday 10 Nov 2021

LONDON (ShareCast) - (Sharecast News) - Analysts at Barclays downgraded their recommendation for shares of Babcock from 'overweight' to 'equalweight' due to the earnings dilution resulting from its recent disposals.
Furthermore, they pointed out that its financial leverage would remain above the average level for the sector despite those asset sales and others that were set to close soon.

Towards mid-August, the defence engineer sold its Marine division for £293m of proceeds at an EV/sales multiple of 2.8 times and its Oil and Gas unit for a further £10m in proceeds.

Combined, those asset sales would cut the company's earnings per share in 2022 and 2023 by approximately 6% and 12%, respectively, the analysts predicted.

In turn, net debt as a proportion of operatings earnings had reduced from 2.5 times in the 2021 financial year to 2.1 times.

So too however, Barclays marked down its target price for the shares from 424.0p to 352.0p.

Babcock had yet to finalise the disposal of its 15.4% stake in the Air Tanker Holdings joint venture.

Completion of that sale was expected to occur in the back half of 2022, for £95m net to Babcock, lowering its leverage further still, to roughly 1.9 times its earnings before interest, taxes, depreciation and amortisation.

Yet while Babcock had set itself a target for net debt of less than 2.0 times earnings, that would remain above the UK defence sector average of 1.0 times.

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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 323.70p
Change Today -0.80p
% Change -0.25 %
52 Week High 380.20
52 Week Low 214.00
Volume 258,495
Shares Issued 505.60m
Market Cap £1,636.62m
Beta 0.05
RiskGrade 290

BAB Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
74.34% below the market average74.34% below the market average74.34% below the market average74.34% below the market average74.34% 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
40.40% above the market average40.40% above the market average40.40% above the market average40.40% above the market average40.40% above the market average
42.86% above the sector average42.86% above the sector average42.86% above the sector average42.86% above the sector average42.86% above the sector average
Income
62.97% below the market average62.97% below the market average62.97% below the market average62.97% below the market average62.97% below the market average
20% below the sector average20% below the sector average20% below the sector average20% below the sector average20% below the sector average
Growth
48.42% below the market average48.42% below the market average48.42% below the market average48.42% below the market average48.42% 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

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 26-Jan-2022

Time Volume / Share Price
16:16 166 @ 323.70p
16:16 160 @ 323.70p
16:16 69 @ 323.70p
16:16 155 @ 324.10p
16:16 800 @ 324.00p

BAB Key Personnel

Chair Ruth Cairnie
CEO David Lockwood
CFO David Mellors

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