Babcock lifts confidence on FY26 as Indonesia deal, naval wins and buyback drive momentum

Babcock International ( (GB:BAB) ) has provided an update.

Babcock International reported continued strong financial and operational performance for the nine months to 31 December 2025, with solid organic revenue growth, improving underlying operating margins and most of its forecast full-year revenue already under contract, underpinning confidence in meeting its 8% FY26 margin target. Growth was driven by robust activity in Nuclear, Aviation and Marine, including new clean energy projects, submarine support work, the ramp-up of France’s Mentor 2 aviation contract and higher volumes in LGE and the Skynet programme, more than offsetting weakness in Land due to lower Rail activity. Operationally, the group highlighted a series of strategic wins and milestones, notably being selected as prime industrial partner for Indonesia’s £4 billion Maritime Partnership Programme and signing a Letter of Intent for two additional Arrowhead 140 licences, progress on its Type 31 frigate build in Rosyth, an expanded partnership with HII to manufacture assemblies for US Virginia-class submarines linked to AUKUS, and further work to position the Royal Navy for autonomous and hybrid naval operations. Babcock also continued to ramp up its £1 billion DSG Land contract, started delivery of Jackal 3 vehicles for the British Army, remained in discussions on a follow-on to its key Future Maritime Support Programme contract, advanced a £200 million share buyback with £90 million already returned, and announced that long-serving CEO David Lockwood will retire by year-end 2026, to be succeeded by Nuclear sector chief Harry Holt, signalling a leadership transition designed to maintain strategic continuity.

The most recent analyst rating on (GB:BAB) stock is a Hold with a £1589.00 price target. To see the full list of analyst forecasts on Babcock International stock, see the GB:BAB Stock Forecast page.

Spark’s Take on GB:BAB Stock

According to Spark, TipRanks’ AI Analyst, GB:BAB is a Neutral.

The score is supported primarily by improving financial performance and a strong, confidence-boosting earnings call with reaffirmed margin targets and solid cash conversion. Technicals indicate an established uptrend but are heavily overbought, raising near-term risk. Valuation is the main drag due to a higher P/E and low dividend yield.

To see Spark’s full report on GB:BAB stock, click here.

More about Babcock International

Babcock International Group is a UK-based engineering services company specialising in the defence, nuclear, aviation and critical infrastructure sectors. It provides complex asset management, support and training services, with a strong focus on naval shipbuilding and support, nuclear submarine maintenance, military vehicle programmes and aviation support contracts for government and commercial customers worldwide.

Average Trading Volume: 1,919,188

Technical Sentiment Signal: Buy

Current Market Cap: £7.39B

See more insights into BAB stock on TipRanks’ Stock Analysis page.