Brokers certainly like the stock and trading on a forward P/E of just over 9 going into 2010, far too cheap imho.

Babcock International Group PLC

FORECASTS
2009 2010

Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Arden Partners
12-03-09 BUY 119.00 41.10 13.50 143.00 49.40 15.50

KBC Peel Hunt Ltd
10-03-09 HOLD 118.36 40.40 13.50 140.73 45.24 15.50

Singer Capital Markets Ltd
09-03-09 BUY 120.10 40.50 14.00 144.40 46.90 15.50

Teathers
04-03-09 BUY 120.51 40.33 13.40 146.94 46.96 15.00

ABN AMRO
10-02-09 HOLD 122.90 39.77 12.50 138.90 44.42 15.00

Numis Securities Ltd
21-01-09 ADD 119.80 41.10 13.00 145.40 48.70 14.10

NCB Stockbrokers Ltd
08-01-09 ACCU 41.25 12.45 46.74 14.37

2009 2010
Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)
Consensus 119.56 40.68 13.37 144.16 47.29 15.37

1 Month Change 0.19 0.09 0.02 0.01 0.45 0.03
3 Month Change 0.49 -0.04 0.09 -0.07 -0.46 0.19


GROWTH
2008 (A) 2009 (E) 2010 (E)

Norm. EPS 36.83% 44.23% 16.25%
DPS 34.59% 49.38% 14.96%

INVESTMENT RATIOS
2008 (A) 2009 (E) 2010 (E)

EBITDA 135.90m 172.74m 194.28m

EBIT 105.00m 142.06m 162.84m

Dividend Yield 1.97% 2.94% 3.38%

Dividend Cover 3.15x 3.04x 3.08x

PER 16.13x 11.18x 9.62x

PEG 0.44f 0.25f 0.59f

Net Asset Value PS -80.79p 168.28p 185.86p

Recently In a trading update, says its order book continued to rise above 5 billion pounds ($7.08 billion) as it signed more contracts, while its performance for the year ending March 2009 was on track to meet expectations. The engineering company, which is helping to build Britain's new aircraft carriers as well as its railways and managing nuclear sites, said its order pipeline made future performance more visible and was broadly resilient to the economic downturn. "We have won a number of contracts since the half year, so it (the order book) is larger than 5 billion pounds," Chief Executive Peter Rogers told Reuters in an interview. He added that he hoped to sign a 400 million pound extension to a dockyard management contract at Devonport in the next couple of months. Analysts are expecting pretax profit before amortisation and exceptional items to come in at 119 million pounds ($169 million) for the year to end March, according to Reuters estimates, up from 95.5 million pounds last year.

Just added on a bit of intra day weakness.

Forward P/E into 2010 of just over 9 is way tooo low and the stock is a screaming Buy imho.

Recent broker Buy notes aswell.....

Babcock International Group PLC

FORECASTS
2009 2010

Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Numis Securities Ltd
31-03-09 BUY 117.20 40.40 13.00 143.60 48.10 14.10

Arbuthnot Securities
31-03-09 BUY 119.10 40.15 13.60 139.54 44.61 15.00

Concensus broker SP target 570p.......

Consensus Broker Estimates

Current Fiscal Year 2009

Consensus Type Mean

Forward PE 10.13

Target Price 5.70

Long Term Growth Rate 18.40

Broker Estimates

Consensus High Low Number of Estimates

Sales 1,868.79 1,948.90 1,675.00 10.00
Profit 118.96 122.90 111.95 9.00
EPS 0.41 0.42 0.38 12.00
DPS 0.13 0.14 0.12 12.00

Recent Broker Buy note..

31-Mar-09 Babcock International Group BAB Arden Partners Buy - - Reiteration

Suprisingly volatile today, added on the dip in the last half hour.

Short term stochs is showing stock is oversold.

"On 23 March 2010, the boards of Babcock International Group PLC and VT Group plc announced that they had agreed the terms of a recommended acquisition by Babcock of the entire issued and to be issued share capital of VT to be effected by a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006.

Further to that announcement, Babcock and VT announce that the Panel on Takeovers and Mergers has granted them an extension in respect of the requirement under Rule 30.1 of the City Code on Takeovers and Mergers to post the scheme document within 28 days of the announcement made on 23 March 2010.

Accordingly, Babcock and VT currently expect that the scheme document will be posted to VT shareholders on or around Monday 26 April 2010. In addition, Babcock expects, on the same date as the posting of the scheme document, to make available its prospectus in connection with the Acquisition on its website (other than to persons in certain jurisdictions, as will be specified in the prospectus) and to post its circular (including a notice of general meeting) in connection with the Acquisition to Babcock's shareholders.

In addition, Babcock is pleased to announce that early termination of the waiting period under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976 (and the regulations made thereunder) was granted in respect of the Acquisition on 19 April 2010, and accordingly the related condition to the Acquisition is now satisfied. The Acquisition remains conditional upon the satisfaction or, if permitted, waiver of the remaining conditions to the Acquisition announced by Babcock and VT on 23 March 2010."

Business Financial Newswire
"Babcock International unveils strong full year with an 8.3bn order book underpinning the positive outlook for the group.

Revenues for the year to the end of March dipped to 1,895.5m from 1,901.9m but operating profits rose 11% to 148.1m and pre-tax profits increased 21% to 129.2m.

Underlying operating profits increased to 164.2m from 147.3m and underlying pre-tax profits rose 20% to 145.3m.

The full year dividend is up 22% at 17.6p.

Chief executive Peter Rogers said: "Babcock has delivered another set of strong results.

"We consider the major markets in which we operate remain attractive with significant long-term growth prospects.

"We believe that our strong market positions and our track record of delivering efficiencies for our customers will be beneficial as pressure on public spending increases.

"The proposed acquisition of VT Group, further strengthens our scale and capabilities in our core markets.

"Our future is supported by an order book of 8.3bn and by the embedded relationships with our key customers that provide us with long-term visibility of future work streams.

"We believe the outlook for the 2010-11 financial year remains positive and we look forward to another year of good progress."

BAB goes ex-divi 16th June '10, paying 12.8p

StockMarketWire.com
"The Office of Fair Trading has decided not to refer the anticipated acquisition by Babcock International of VT Group to the Competition Commission. "

StockMarketWire.com
"Engineering group, Babcock International says the 2010/11 financial year has started well and trading is in line with expectations.

The Group reports excellent visibility, supported by the long-term nature of its contracts, a strong order book and robust bid pipeline.

The Board says that the outlook for the 2010/11 financial year remains positive and it looks forward to another year of good progress. Since the start of this financial year, the Group says the order book has been stable at around 8.3bn.

Cash generation has remained strong and the Group has continued to use cash to pay down debt

As the Government seeks to address the fiscal deficit in the UK, the Group believes there will be an increase in outsourcing opportunities in its chosen markets. "

StockMarketWire.com
"Engineering support services firm Babcock International has completed its acquisition of VT Group.

Trading in VT shares on the London Stock Exchange will be cancelled at 8a.m tomorrow (9th July). "

StockMarketWire.com
"Engineering support services group Babcock International continued to make good progress during the fist half of its financial year.

Trading and the financial and operational performance of the group's long-term support contracts have been strong and in line with our expectations.

The group's order book now stands at around 12bn with the pipeline of opportunities that are currently being bid valued at around 5bn. "

"Despite profit being 2% below Panmure Gordon's forecasts, the broker has retained its 'buy' recommendation for Babcock International after a "solid set of first half results".

"Marine once again delivered a robust growth and margin performance, with the company seeing lots of opportunities in its Defence business."

While US operations remaining stable and in line with expectations, South Africa continues to go "from strength to strength", the broker says.

The broker notes that the integration of VT is progressing well, with Babcock confident of achieving the merger benefits of 50m by 2013.

A better-than-expected cash conversion of 189% brought net debt down to 796m, compared to the broker's forecast of 861.1m. That has given the company scope to bump up the interim dividend by 8% or so, in line with the group's avowed intention to stick to a progressive pay-out policy.

Panmure maintains its target price of 750p, based on 13 times the projected 2013 earnings per share value, and with an excess of 30% upside potential, it confirms a 'buy'.

KBC Peel Hunt is also a buyer of the shares, but won't be adjusting its full year estimates after the "in line" interim results."

BAB goes ex-divi 15th Dec '10, paying 5.2p

StockMarketWire.com
Babcock initiated with buy recommendation at RBS, target price 620p.

StockMarketWire.com
Engineering support services provider Babcock International Group PLC will release its interim management statement on Tuesday, 25th January.

StockMarketWire.com
Engineering support services group Babcock International continues to trade in line with its expectations.

The group's order book remains stable at around 12bn reflecting the constant flow of new contracts, rebids and contract extensions from the pipeline into the order book.

As anticipated, the pipeline of bids at PQQ or ITT stage has increased and now stands at 6bn and the board remains confident in the outlook for this financial year and thereafter.

It adds: "As part of the Government's ongoing discussions with its key suppliers, we continue to be involved in positive dialogue with our key customers at the Ministry of Defence and with the Cabinet Office.

"We expect discussions with the Cabinet Office to be concluded by the end of the financial year.

"We anticipate the outcome of the comprehensive spending review and strategic defence and security review will lead to significant new outsourcing opportunities.

"We believe our scale, expertise and track record of delivering financial and operational efficiencies will place us in a strong position."

Wakefield Waste PFI Project - Teaming Agreement
Babcock International announces it has entered into a teaming agreement with Shanks Waste Management Ltd in respect of the Wakefield Waste Management PFI project. Shanks brings strong and proven waste management experience to the team which will now seek to achieve financial close. The agreement provides a mechanism for Shanks to acquire Babcock's waste business following financial close, which is expected later this year.

Joanne Roney, Chief Executive of Wakefield Metropolitan District Council comments

"We are very pleased that Babcock and Shanks have entered into this agreement and I look forward to working with the team to move the project to financial close".

Babcock International Group PLC will release its Pre-close Trading Statement on Tuesday 29th March 2011, ahead of reporting full year results for the year ending 31st March 2011 on Tuesday 17th May 2011.

Just gone long again.