Babcock International Group PLC (BAB) fair value: what the stock is really worth
As of Nov 6, 2026: fair value (intrinsic value) of Babcock International Group PLC stock £9.08, price £10.07, that is 9.8% below the price, quality 53 out of 100. Rating: overvalued. Calculated from audited financials with 24 of our 26 valuation models and 37 quality factors, updated daily.
69 individual criteria per stock, every one traceableSee the method →
Price vs Fair Value
White line = price, green steps = our fair value per fiscal year. As of Nov 6, 2026.
How to read this chart
60‑month range £2.69 – £15.02 · fair‑value band £6.81 – £11.35 · the £10.07 price screens above the £9.08 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). 1 fiscal year is left out: there the valuation rested on only a fraction of the usual models. As of Nov 6, 2026.
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Babcock International Group PLC, together with its subsidiaries, engages in the design, development, manufacture, and integration of specialist systems for aerospace, defense, and security in the United Kingdom, rest of Europe, Africa, North America, Australasia, and internationally.
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It operates through four segments: Marine, Nuclear, Land, and Aviation. The company offers type 31 frigates, project lurcher, jackal contract, ground deployed advanced mortar system, general logistics vehicle, Babcock's LGE, and armored land cruiser 300.
It also provides weapons handling systems, autonomous and uncrewed aerial systems, and engineering and systems integration.
In addition, the company is involved in the design, integration, and through-life support of various connected combat, support, and surveillance vehicles; integration of long-range fires and C4ISTAR systems; provision of system engineering and general vehicle architecture services; and specialist vehicle conversions.
Further, it provides equipment support, frontline support, and training services. The company was founded in 1891 and is based in London, the United Kingdom.
Stock analysis
Babcock International Group PLC (BAB) currently trades at £10.07, while our model-based Fair Value estimate is £9.08, 10% below the price, so the stock looks overvalued today.
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Valuation
Bull case: the DCF Models group reads highest at a median of £10.23 per share, and 6 of the 24 models we run sit above the £10.07 price.
Bear case: the Dividend Discount group reads lowest at £1.07, and 18 of the 24 models stay below the price. Data coverage for this calculation is high.
Scenario range: £6.81 (bear) to £11.35 (bull), the price of £10.07 sits inside it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 53/100 (solid quality), in the Industrials sector.
Healthy Growth: Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Babcock International Group PLC reported revenue of £5.2B in FY2026 versus £4.1B in FY2022, a compound +6.0%/yr. Reported net income was £211M in FY2026, compounding +6.5%/yr from FY2022.
Key figures
Market cap £5.1B Mid · P/E ratio 24.5 · P/S ratio 0.99 · EPS (TTM) £0.4100 · Dividend yield 0.7% · Net margin 4.1% · Return on equity 33.7% · Return on assets (EBIT) 6.8% (5-year average).
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 51 out of 100 (low confidence).
What moves the price
The last reported earnings sit well below what analysts expect (earnings in transition, for example after write-downs or an earnings dip); whether the stock is cheap or expensive hinges on the expected recovery actually arriving. Read the fair value with that caveat.
The share trades about 33% below its 52-week high and 13% above its 52-week low, currently below its 200-day average.
For context, the median of 10 Industrials peers we cover trades at −42% fair-value upside, at −10%, BAB screens cheaper than that median.
Fair Value models
Bear£6.81Fair Value £9.08Bull£11.35
Price £10.07 · Downside -9.8%
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above starts from their evidence-weighted blend, not from a single model. In cyclical trough or peak years, after dilution or a stock split it is adjusted afterwards, so it can sit above or below the models. Based on fiscal year 2026 figures (about 7 months old). Earnings retained since then (£0.2077 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. If a model's bull case is above four times its base value, the table shows that limit with a > sign (like the overall Bull above): beyond it no assumption holds.Coverage ⓘCoverage = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.70/100
Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Revenue growth 1 year
+7.2%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+5.3%
Revenue growth 5 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+5.5%
Start year 2021 (pandemic). Over 10 years: +2.2% a year
Revenue growth 36 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+6.1%
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What shareholders gained per year (last 5 years) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate.
+5.9%
Earnings growth per share plus dividend.
Earnings per share, growth per year+5.2%
Dividend (yield on the price)0.7%
Pace: 5 vs 10 years ⓘTwo data points, not a trend model: earnings growth per share over the last 5 fiscal years against the last 10. Labelled "steady" when both rates are within 3 percentage points of each other, otherwise picking up or flattening. Shown only when ten years of history exist.5.2% vs −3.1%, picking up
Profit margin 2021 to 2026 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.−1% → 6%
Pace: the 5-year rate starts in 2021 (pandemic)
Growth Forecast
A lot of optimism in the price
The price assumes more growth than the company has delivered so far and more than analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
+10.0%
Yearly growth needed for the next five years to justify today's price.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
+4.7%
Yearly sales growth analysts expect, extended to five years.
After inflation (UK: IMF forecast 2.3% a year to 2030, 3.3% from 2016 to 2025) that is about +7.5% a year for the price and +2.3% for the forecasts.
News mood ⓘNews mood, the average tone of recent news (93 articles), rated against how stocks are usually covered. 🚀 Hype = unusually upbeat · 🙂 Positive = above average · 😐 Neutral = typical · 🙁 Negative = below average · 😨 Very negative = unusually downbeat. It reflects the tone of coverage, not our valuation.Positive
Recent news coverage is more positive than average.
AI conclusion: Sole supplier status for Royal Navy nuclear submarine support forms the core strength while high leverage above equity and uncertain long-term contract timing form the main weakness.
Main risk: The company depends on a small number of government customers, chiefly the UK Ministry of Defence, for its submarine support and defence work, which could expose it to contract changes or reduced margins if spending priorities shift.
Bull case: By deepening its role as integrator in hybrid naval programmes and expanding civil nuclear work through partnerships, the company could secure longer-term frameworks and diversify beyond core MOD contracts.
Bear case: If key MOD contracts face prolonged extensions, scope reductions or regulatory hurdles that delay work, the company could see sustained pressure on revenues and margins from its primary customer base.
Babcock holds the sole position supplying in-service support for the Royal Navy’s nuclear submarines, yet recent two-month extensions to its bridging contract highlight the drawn-out path to a longer-term framework. Analysts see civil nuclear activities as the clearest source of upside beyond the current defence workload. Will reliable delivery on core submarine programmes drive steadier growth, or will civil nuclear work open a meaningfully larger path forward?
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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Engineering & Construction · 791 stocks
Beats the industry median on 5/14 measures
Overall it trails its industry peers.
Valuation
Quality Score53 · Above median
Fair Value upside−9.8% · Below median
Profitability
Return on equity (12 months)33.7% · Top 25%
Return on assets5.4% · Above median
Net margin (12 months)4.1% · Above median
Operating margin (12 months)1.4% · Below median
Growth and dividend
Revenue growth (quarter YoY)8.9% · Above median
Dividend yield (12 months)0.7% · Bottom 25%
Balance sheet
Debt / equity0.77× · Highest 25%
Valuation Multiplesvs Engineering & Construction median · lower = cheaper
P/E (12 months)24.5× · Pricier than median
P/B8.38× · book value is mostly goodwill ⓘGoodwill and other intangible assets are larger than the equity. The book value mainly reflects prices paid for past acquisitions, so we do not rank this P/B against the peer group.
P/S (12 months)0.99× · Pricier than median
Price / free cash flow (fiscal year)19.6× · Pricier than median
For bloggers, editors and developers: paste this into your site or blog (a “Custom HTML” block in WordPress), it shows the current fair value and links back here. Free, plain HTML, and welcome. Full data streams (CSV/JSON) at /developers.
Cite: Fair Value Calculator (2026). "Babcock International Group PLC Fair Value". https://www.fairvalue-calculator.com/stock/BAB
Frequently asked questions
Is Babcock International Group PLC (BAB) overvalued or undervalued?
As of Nov 6, 2026, our model estimates a fair value of £9.08 versus a price of £10.07, about 10% lower (overvalued).
What is the fair value of BAB?
Our model-based fair value for Babcock International Group PLC is £9.08 (as of Nov 6, 2026), built from audited fundamentals. The current price: £10.07.
What is the quality score of BAB?
Babcock International Group PLC has a Quality Score of 53/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Babcock International Group PLC (BAB)?
Our model-based price target is the fair value of £9.08 (as of Nov 6, 2026) from 24 valuation models. Cautious scenario £6.81, optimistic scenario £11.35. It is a calculation from audited fundamentals, not an analyst target.
What is the Babcock International Group PLC stock forecast for 2026?
Our models put fair value at £9.08, about 10% lower versus a price of £10.07 (overvalued). Cautious scenario £6.81, optimistic scenario £11.35. The calculation is refreshed regularly with new filings.
What is the revenue of Babcock International Group PLC (BAB)?
Babcock International Group PLC reported trailing-twelve-month revenue of about £5.2B (latest available figure, as of Nov 6, 2026).
Does Babcock International Group PLC pay a dividend?
Babcock International Group PLC currently shows a dividend yield of 0.70% relative to its recent price (as of Nov 6, 2026).
How much is the dividend of Babcock International Group PLC (BAB) and when is the ex-dividend date?
Babcock International Group PLC pays a dividend of £0.07 per share a year, a dividend yield of 0.7%. The last ex-dividend date was Aug 13, 2026. The payout ratio is 17.1% of earnings. Free cash flow covers the dividend 7.70 times. Our assessment: Well covered. A low payout and the dividend is fully funded by free cash flow, a comfortable, sustainable dividend.
What growth is priced into Babcock International Group PLC (BAB)?
For today's price to be fair in a discounted-cash-flow model, Babcock International Group PLC would have to grow free cash flow by +10.0 % per year for five years (discount rate 10.0 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +5.5 % per year. As of Nov 6, 2026.
What discount rate (WACC) does the fair value of BAB use?
Our models discount Babcock International Group PLC at 10.0 %: a base by market capitalisation (mid), damped by beta 0.89, country premium for United Kingdom. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For Babcock International Group PLC that is +10.0 % per year for five years, then slowing evenly to 2 % by year ten, using the same discount rate (10.0 %) and the same formula as our fair value.
How much growth has Babcock International Group PLC (BAB) delivered so far?
Over the past 5 years revenue at Babcock International Group PLC grew +5.5 % a year. The price currently implies free-cash-flow growth of +10.0 % per year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of Babcock International Group PLC (BAB) growing?
The median revenue growth in the sector is +7.8 % a year. That is the yardstick for the growth priced into Babcock International Group PLC (+10.0 % per year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of Babcock International Group PLC (BAB)?
The free-cash-flow yield on the price is 5.12 %: that much free cash flow Babcock International Group PLC produces per unit of market value. When it exceeds the discount rate of our models (10.0 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of Babcock International Group PLC (BAB)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Babcock International Group PLC it is £9.08 per share (as of Nov 6, 2026), against a price of £10.07. It is the blended result of 24 valuation models in 7 families (DCF Models, Earnings-Based, Dividend Discount, Multiples, Growth DCF, Economic Profit, Growth Earnings).
Is Babcock International Group PLC stock overvalued or undervalued in 2026?
As of Nov 6, 2026, BAB trades above its calculated fair value: price £10.07, fair value £9.08, a gap of about −10% (overvalued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of BAB?
No. The price is what the market pays today (£10.07); the fair value is what the company's own numbers justify (£9.08). For Babcock International Group PLC the two are £0.9850 per share apart. That gap is exactly why we show both numbers side by side.
How much is Babcock International Group PLC worth?
The market values Babcock International Group PLC at about £5.1B (market capitalisation, as of Nov 6, 2026). Per share that is £10.07; our models calculate a fair value of £9.08 per share.
What do the bullish and bearish scenarios say about BAB?
Our models span a range for Babcock International Group PLC: cautious scenario £6.81, base £9.08, optimistic £11.35 per share (as of Nov 6, 2026, price £10.07). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of BAB?
Babcock International Group PLC trades at a price-to-earnings ratio of 24.5 (as of Nov 6, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of £9.08 is built from several models across several years. Median P/E at fiscal year-end, 7 fiscal years (2017 to 2026), reported earnings: 14.3. Other multiples: PEG 1.4, P/B 8.4, P/S 1.0, EV/EBITDA 13.7.
What is the PEG ratio of BAB?
The PEG ratio of Babcock International Group PLC is 1.37 (P/E divided by earnings growth, as of Nov 6, 2026). That is above 1, so the growth is already paid for in the price.
How solid is the balance sheet of Babcock International Group PLC (BAB)?
Balance-sheet figures for Babcock International Group PLC (as of Nov 6, 2026): return on equity 33.7%, debt of 0.77 per unit of equity. They feed the Quality Score of 53/100, which measures business quality independently of the share price.
How far is BAB from its 52-week high?
Babcock International Group PLC trades at £10.07, about 33% below its 52-week high of £15.02 and 13% above the low of £8.87 (as of Nov 6, 2026). Distance from the high says nothing about value: that is what the fair value of £9.08 is for.
Which stocks are comparable to Babcock International Group PLC?
From the same area (Industrials) we also value Quanta Services, Inc, Vinci SA, Larsen & Toubro Limited, Comfort Systems USA, Inc, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Babcock International Group PLC stock attractive at the current price?
The data as of Nov 6, 2026: price £10.07, calculated fair value £9.08 (−10%), Quality Score 53/100, from 24 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of BAB calculated?
We run Babcock International Group PLC through 24 models from 7 families: DCF Models, Earnings-Based, Dividend Discount, Multiples, Growth DCF, Economic Profit, Growth Earnings. Every model gets the same audited fundamentals; the fair value of £9.08 builds on their evidence-weighted average, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 13.3% above its aggregate fair value. Babcock International Group PLC itself currently trades above fair value. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Babcock International Group PLC (BAB)?
The closing price on Nov 6, 2026 was £10.07. Our model-based fair value is £9.08, about 10% lower (overvalued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Babcock International Group PLC right now?
The price sits in the upper half of our model range, so the margin of safety is thin. The data supports the verdict: every model runs on fully documented inputs.
Where does the earnings growth of Babcock International Group PLC (BAB) come from?
Earnings per share at Babcock International Group PLC grew −3.7 % a year from 2015 to 2026. Broken into its drivers: revenue per share +1.1 %, EBIT margin −2.8 %, tax rate −1.5 %, residual (interest, one-offs) −0.5 %. The four rates multiply to the earnings growth rate, they do not add up. Start and end are three-year averages so a single exceptional year does not distort the result.
Key figures of Babcock International Group PLC
How large is the market capitalisation of Babcock International Group PLC (BAB)?
The market capitalisation of Babcock International Group PLC is £5.1B. The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Babcock International Group PLC (BAB)?
The price-to-sales ratio of Babcock International Group PLC is 0.99 (last twelve months). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Babcock International Group PLC (BAB)?
Earnings per share at Babcock International Group PLC are £0.4100 (price ÷ EPS = P/E 24.5). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Babcock International Group PLC (BAB)?
The dividend yield of Babcock International Group PLC is 0.7% (payout 17.1%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Babcock International Group PLC (BAB)?
The net margin of Babcock International Group PLC is 4.1% (last twelve months). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Babcock International Group PLC (BAB)?
The return on equity (ROE) of Babcock International Group PLC is 33.7% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Babcock International Group PLC (BAB)?
On an EBIT basis the return on assets of Babcock International Group PLC is 6.8% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Babcock International Group PLC (BAB)?
The operating margin of Babcock International Group PLC is 1.4% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Babcock International Group PLC (BAB)?
Revenue at Babcock International Group PLC is growing +8.9% versus a year earlier (3y avg +5.3%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Babcock International Group PLC (BAB)?
Earnings per share at Babcock International Group PLC are growing −63.9% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does Babcock International Group PLC (BAB) carry?
The net debt of Babcock International Group PLC is £358M (fiscal year 2026, ≈ 1.4 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Broad data
Nov 6, 2026