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On Wednesday, JPMorgan analysts reiterated an Overweight rating on Babcock International Group (LON:BAB) Plc stock, maintaining a price target of £12.80. The analysts placed the company on a Positive Catalyst Watch in anticipation of its year-end results for March 2025, scheduled for June 25.
The analysts highlighted two key reasons for their positive outlook. Firstly, they anticipate Babcock could set new medium-term financial guidance with the upcoming results. Secondly, they view Babcock as a significant beneficiary of the UK Strategic Defence Review released on Monday.
The price target, based on multiples, suggests a potential upside of approximately 25% over the next 18 months. This optimistic projection is supported by JPMorgan’s earnings per share estimates for the fiscal years ending March 2025 to 2027, which exceed Vuma consensus by 7%, 6%, and 5%, respectively.
Babcock is noted as one of the most affordable European defense stocks covered by JPMorgan, enhancing its attractiveness to investors. The analysts expect the company to emphasize opportunities from the Strategic Defence Review in its upcoming results meeting.
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