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

I have plenty of these from the 518p level and similar broker price targets have been around for quite a while. Clearing the 600p level and staying there seems to be a real struggle. With hindsight I should have traded in & out. I thought the VT takeover would have pumped up the valuation, but little seems to have happened.

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StockMarketWire.com
Support services group Babcock International said the trading environment as a whole has been stable, with no significant changes to market conditions.

The Group's financial performance for the 2010/11 full year remains consistent with our expectations at the time of our Interim Management Statement on 25th January 2011. Across divisions, all major support contracts continue to perform well and the group continues to benefit from the long-term nature of contracts.

VT Integration - The structural reorganisation following the acquisition has been completed speedily and efficiently and the business units are focused on delivering the significant operational benefits of bringing the two complementary businesses together. The delivery of merger benefits is on track and Babcock said it is confident of achieving 50m (pre-tax) in total and as scheduled.

Cash generation throughout the year has been strong and has been used to pay down debt. As a result, net debt is expected to be below 750m at end-March 2011 and the resulting net debt to ebitda ratio to be significantly below the 2.8 times reported at the end of the first half.

Since the completion of the VT acquisition in July, the order book for the combined Group has been stable at around 12bn, reflecting a steady inflow of new contracts, rebids and contract extensions from the bid pipeline.

The pipeline of bids at PQQ or ITT stage currently stands at c 7bn, increasing from 6bn at the time of the IMS in January 2011. Since the award of the five year, 200m British Forces Germany facilities management contract announced in February, Babcock has also been down-selected by the MoD as the sole industry bidder for the 10 year, c 300m Maritime Equipment Transformation (MET) programme.

Babcock said it remains confident that the current economic climate will drive both public and private sector organisations to increase their focus on outsourcing as they seek to reduce operational costs and drive efficiencies. Outlook

In both the UK and overseas the Group is well placed in markets that offer significant long-term growth opportunities.

With good progress being made to achieve the synergy savings identified as part of the VT acquisition and improving contract margins in the Support Services and International divisions, Group operating margins have further scope to improve from the 31st March 2010 level.

Babcock will announce full year results on 17th May 2011.

Solid statement.

Looks to me like this ones hit a top for the time being and I can see it falling back as it has done historicaly 150 points to around the 520p/500p support.

Must say had a good run out of it, But TA pointing to weakness now.

Looking like a Strong SHORT here at BAB Babcock............

Interesting to note as we have gotten nearer resistance on the chart above the amount of stock on loan , ie a proxy for shorting has increased. Obviously other chartists are taking short posiions here in anticipation off a fall in the SP.......

definite short for sure imo - everything including 29/3/11 statement above & other items points to it strongly

btw the reason babcock sole bidder for the 10 year c 300m Maritime Equipment Transformation (MET) programme i am told is that no one else is interested due to various complexities, has to go through the long drawn out european directive ojeu proces etc etc and potential tiny margin - MET driving costs down apparently requiring according to rumour fixed price / fixed deliverables rather than the much more profitable time & materials option - just passing on info

Cheers Gibby, much appreciated.

BAB BABCOCK...

Done same gone from short to long.

10-May-11 Babcock International Group BAB UBS Buy 651.00p - 770.00p New Coverage

770p SP target.

BAB excelent results this morning expect Broker upgrades....

BAB Heres last 3 Broker Buy recommendations............

Date #ADVFN $205 http://t.co/AkdAQI4

Broker upgrades out already on BAB

..Investech raises Babcock International (BAB.L) target price to 700p from 650 and rates buy
* Panmure raises its target price to 780p from 750p and rates buy
* Peel Hunt raises its price target to 735p from 675p and rates buy

VT benefits start to accrue for Babcock

Created: 17 May 2011 Written by: Mark Robinson

Though public spending reviews and private sector retrenchment provided the backdrop for much of the past year, a subsequent rise in outsourcing opportunities and the successful integration of VT Group provide grounds for optimism for Babcock International.
During a period of 'tight financial constraints', the acquisition of VT has broadened the range of engineering support services that Babcock can offer its existing and prospective customer base. So, while the group order book has remained stable at around 12bn since the acquisition, Babcock experienced an encouraging 70 per cent rise in its bid pipeline during the second half to 8.5bn.
At constant exchange rates and adjusting for disposals and the 856m nine-month contribution from VT Group, full-year underlying revenues rose 5 per cent. Operating margins rose 1.3 percentage points to 9.9 per cent, reflecting 11.6m of cost savings in the period and growth of higher margin business in support services, defence and security. Cost savings are expected to rise to 50m by 2013.
Investec Securities anticipates current year adjusted pre-tax profits of 280m and EPS of 61p (228m and 55p in 2011).
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BABCOCK INTERNATIONAL (BAB)
ORD PRICE: 689p MARKET VALUE: 2.5bn
TOUCH: 688.5-691p 12-MONTH HIGH: 693p LOW: 489p
DIVIDEND YIELD: 2.8% PE RATIO: 22
NET ASSET VALUE: 282p* NET DEBT: 71%
Year to 31 Mar Turnover (bn) Pre-tax profit (m) Earnings per share (p) Dividend per share (p)
2007 0.99 57 21.5 8.10
2008 1.56 85 30.0 11.5
2009 1.90 107 37.4 14.4
2010 1.90 129 46.3 17.6
2011 2.76 115 31.3 19.4
% change +45 -11 -32 +10
Ex-div: 8 Jul
Payment: 9 Aug
*Includes intangible assets of 2.09bn, or 582p a share
More analysis of company results
TIP UPDATE:
Buy
Babcock's highly specialised, long-term naval contracts ensure that over two-thirds of its revenues are already contracted for 2011-12, while new business streams are improving. At 689p, Babcock's shares are up 18 per cent on our buy tip (689p, 1 July 2010), but are trading at a modest 11 times forwards earnings and continue to rate a buy.
Last IC view: Buy, 571p, 26 January 2011

http://www.investorschronicle.co.uk/Tips/Buy/TipsOfTheWeek/article/20110517/63fb67f8-807e-11e0-8834-00144f2af8e8/VT-benefits-start-to-accrue-for-Babcock.jsp
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09 May Babcock... BAB Panmure Gordon Buy 809.75 850.00 850.00 Retains

850p SP target.

Done an about turn here gone short.
The uptrend is breaking down.

All the lower indicators have turned
negative.

Tweeted this earlier....

Gone short on BAB Babcock. Bullish uptrend breaking down, momentum and ADX turning negative. Down through 13 day EMA.

BAB shorted first thing......

BAB Babcock

Technically uptrend has broken
down and lower indicators are turning
bearish.

Looks a good call GF.

Yep but beware as SC says results tues, mind most results even if good have seen sps slipping. of late.