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Investing.com - Deutsche Bank (ETR:DBKGn) downgraded Babcock International Group Plc (LON:BAB) (OTC:BCKIF) from buy to hold on Friday, while raising its price target to GBP11.15 from GBP9.65.
The defense contractor delivered fiscal year 2025 results that aligned with upgraded guidance issued in April, achieving double-digit organic revenue growth and a 50 basis point EBIT margin improvement during the year.
Based on this strong operational performance, Babcock management raised its medium-term EBIT margin guidance to 9% from the previous target of 8%, while maintaining its mid-single-digit organic growth and greater than 80% operating cash flow targets.
The company also announced a £200 million share buyback program, which Deutsche Bank noted demonstrates the "transformed balance sheet offering capital allocation optionality."
Deutsche Bank increased its fiscal years 2026-2027 earnings per share estimates for Babcock by 4-9% following the results and guidance update.
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