Citi downgraded Babcock on Thursday to ‘neutral’ from ‘buy’ as it increased its price target and said the company’s medium-term guidance is conservative.
Babcock International Group
05 February 2026 09:04:41
Source: Sharecast
"The key question is how conservative and what does that mean for valuation? We estimate that taking the low end of guidance, the fair value is 1,119p, so the market is already pricing in more," Citi said.
"Flexing the drivers, we establish a range of fair values up to 2,000p, with our base case fair value of 1,464p.
"We then add an additional 90p of optionality from Babcock’s participation in X-Energy’s AMR and Rolls-Royce’s SMR programs to give our new target price of 1,554p - with only circa 8% upside, we are downgrading to neutral."
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