- Babcock International Group
- 25 April 2025 16:44:54
Source: Sharecast
They based their decision on the favourable forecasts for defence markets in the UK and Europe, the "major" steps taken to de-risk the company's pension deficit and the reduction in leverage to below management's own medium-term guidance.
In the case of the latter, they estimated that net debt was standing at 0.3 times EBITDA on a covenant basis at the end of fiscal year 2025.
That compared to guidance for 1.0-2.0 times' over the medium-term.
"This stronger balance sheet offers growing optionality to invest further to sustain organic growth, pursue bolt-on M&A or increase shareholder returns," the analysts pointed out.
Hence, they judged that Babcock was making good progress towards its medium-term guidance.
Berenberg's recommendation for the shares was kept at 'buy'.