Babcock International Group PLC (BAB.L) stock analysis

In our weekly check, Babcock International Group PLC is graded B (A to F). Of 24 checks on debt, profit, cash flow and trend: 19 pass, warnings: 1, red flags: 4.

About Babcock International Group PLC

Babcock International Group PLC is an Industrials company (Engineering & Construction) based in the United Kingdom, listed on LSE as BAB.L.

What our checks show for BAB.L

Red flags

• The gross margin fell by 15.7 points, to 5.9%: costs are rising faster than prices.
• The net margin is only 4.1%: little room if costs rise.
• The stock has fallen as much as 85% from a peak. Would you have held through that?
• Recovering from its deepest fall took about 4.6 years.

Warning signs

• Net debt is 0.8x a year of EBITDA (debt/equity 1.79). That limits room in a downturn and raises refinancing risk.

Strengths

• Operating cash flow is 1.96x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 23.8% a year over the next years.
• Analysts expect the net margin to improve by 2.8 points from today's 4.1%.
• Earnings per share grew 82.3% a year over the last 3 years.
• The dividend takes 12% of profit: there is a cushion.
• Return on capital (ROCE) is 19.3%: the business earns well on the money put into it.

Next earnings report: 2026-11-19

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Questions

What grade does Babcock International Group PLC (BAB.L) have?

In our weekly check, Babcock International Group PLC is graded B (A to F). Of 24 checks on debt, profit, cash flow and trend: 19 pass, warnings: 1, red flags: 4. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of BAB.L stock?

This week's biggest flags for Babcock International Group PLC: Gross margin falling, Thin margins, Deep past fall. In total 5 of 24 checks show a warning or a red flag.

What does Babcock International Group PLC do?

Babcock International Group PLC is an Industrials company (Engineering & Construction) based in the United Kingdom, listed on LSE as BAB.L.

When does Babcock International Group PLC report earnings next?

The next earnings report is expected on 2026-11-19. We re-run the checks every week, so the grade can change after it.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-31

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