Good house, challenging neighbourhood

Research evidence excerpt

Good house, challenging neighbourhood

Deutsche Bank Group

Deutsche Numis Research

Rating Company Date

Hold Babcock 22 June 2026

Forecast Change

Europe International

United Kingdom

Reuters Bloomberg Exchange Ticker Price at 19 Jun 2026 (GBP) 1,046.00

BAB.L BAB LN LSE BAB

Price Target (GBP) 1,140.00

Business Services

Outsourcers ADR ISIN 52-week range (GBP) 1,502.00947.50-

BCKIY US0561551047

Good house, challenging

Valuation & Risks neighbourhood

James Beard

Numbers as expected, medium-term targets unchanged Research Analyst

Revenue £5.2bn +8% organic YoY, EBIT £293.3m -19% YoY due to £140m Type 31 +44-20-754-56765

charges as disclosed in the FY trading update – excluding this EBIT £433m +19%

David Brockton

YoY with EBIT margin 8.2% +70bp, EPS exc. Type 31 charges 60.5p +23% YoY. Research Analyst

Management’s FY27 guidance is unchanged and it reiterated its medium-term +44-20-754-11721

targets (mid-single-digit organic revenue growth, 9% EBIT margin, avg underlying

Steve Woolf

OCF conversion >80%).

Research Analyst

+44-20-754-54604

New CEO commentary suggests no drastic changes upcoming

Bharat Rajesh, CFA

Incoming CEO Harry Holt (starts as CEO 01-Aug; was previously CEO of Nuclear

Research Associate

division; spent c.20y in UK military and c.15y in industry prior to this) indicated there

was unlikely to be a material shift in strategic direction in the short term at least, and

that key themes for the business during his tenure are likely to be: (i) the new nature Key changes

of warfare (the linkage between manned and unmanned platforms across all

1,350.00 to

combat arenas); (ii) war-fighting readiness (sweating availability of existing assets/ TP 1,140.00 ↓ -15.6%

platforms); (iii) national strategic resilience (a focus of all key target countries).