Babcock International Group (BAB)

Sector:

Defense and Aeronautics

Index:

FTSE 250

520.00p
   
  • Change Today:
    -12.00p
  • 52 Week High: 537.00
  • 52 Week Low: 269.00
  • Currency: UK Pounds
  • Shares Issued: 505.60m
  • Volume: 999,519
  • Market Cap: £2,629.10m
  • RiskGrade: 290

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 520.00p
Change Today -12.00p
% Change -2.26 %
52 Week High 537.00
52 Week Low 269.00
Volume 999,519
Shares Issued 505.60m
Market Cap £2,629.10m
RiskGrade 290

BAB Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
42.99% below the market average42.99% below the market average42.99% below the market average42.99% below the market average42.99% below the market average
60% below the sector average60% below the sector average60% below the sector average60% below the sector average60% below the sector average
Price Trend
93.03% above the market average93.03% above the market average93.03% above the market average93.03% above the market average93.03% above the market average
45.45% above the sector average45.45% above the sector average45.45% above the sector average45.45% above the sector average45.45% above the sector average
Income
57.63% below the market average57.63% below the market average57.63% below the market average57.63% below the market average57.63% below the market average
50% below the sector average50% below the sector average50% below the sector average50% below the sector average50% below the sector average
Growth
96.31% below the market average96.31% below the market average96.31% below the market average96.31% below the market average96.31% below the market average
100% below the sector average100% below the sector average100% below the sector average100% below the sector average100% below the sector average

What The Brokers Say

Strong Buy 6
Buy 3
Neutral 1
Sell 0
Strong Sell 0
Total 10
strong_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 Interim
Ex-Div 23-Nov-23 05-Dec-19
Paid 19-Jan-24 17-Jan-20
Amount 1.70p 7.20p

Trades for 28-Mar-2024

Time Volume / Share Price
16:57 4,179 @ 526.10p
16:35 756,060 @ 520.00p
16:35 340 @ 520.00p
16:35 9,559 @ 520.00p
16:35 96 @ 520.00p

BAB Key Personnel

Chair Ruth Cairnie
CEO David Lockwood
CFO David Mellors

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