UK's Babcock rises as Peel Hunt upgrades to 'buy'

Babcock International

20/05/2026 08:12

** Shares of defense contractor Babcock International Group BAB.L rise nearly 1.4% to 1,001p

** Peel Hunt upgrades stock rating to "buy" from "add" and says, "we continue to envisage potential mid- to high-teens earnings growth over the medium term and beyond"

** Brokerage, however, trims PT to 1,409p from 1,582p, representing a 42.7% upside to the stock's last close

** Brokerage says the Type 31 contract includes an additional 140-million-pound ($189.64 million) charge, reflecting higher-than-expected levels of rework in the outfitting stage

** Last week, co signed a fixed-price contract in 2019 to deliver five Type 31 frigates to the Royal Navy, but inflation and design rework have driven losses above 300 million pounds ($401.64 million)

**  Average rating of nine analysts is "buy"; with a median PT of 1,477p - data compiled by LSEG

** Up to last close, the stock had fallen ~20% YTD

($1 = 0.7469 pounds)

(Reporting by Akriti Shah in Bengaluru)

((akriti.shah@thomsonreuters.com ; X, formerly Twitter: @AkritiShahh)))