Citi hikes Babcock price target, reiterates ‘buy’ rating.
Citi hiked its price target on Babcock on Monday to 1,338p from 730p and reiterated its ‘buy’ rating as it said growth is likely to accelerate over the next 10 years.
Babcock International Group
30 June 2025 09:04:45
Source: Sharecast
The bank said it was updating its our forecasts, with three main changes: 1) reaching 8% margins a year early in FY March 2026; 2) 9% margins by March 2030; and 3) accelerating growth post-2030.
Citi said it’s the accelerating growth that really changes its fair value. It noted that prior to last week’s Nato conference, the UK defence budget was expected to reach 2.5% in 2027 and remain at that level.
"The new commitment to grow from circa 2.5% in 2029 to 3.5% in 2035 means that we lift our medium-term growth (years 6 -10) from 3% (in line with nominal GDP) to 9%," it said.
The bank said these factors are behind the price target increase.
Halifax is not responsible for the content and accuracy of the Markets News articles. We may not share the views of the author. Understand the risks, please remember the value of your investment can go down as well as up and you may not get back the full amount you invest. We don't provide advice so if you are in any doubt about buying and selling shares or making your own investment decisions we recommend you seek advice from a suitably qualified Financial Advisor. Past performance is not a guide to future performance.
