Babcock Raises Profit Target, Announces £200 Million Share Buyback Amid Defense Spending Surge

UK defense firm Babcock International Group has raised its medium-term profit target to an underlying operating margin of at least 9%, up from at least 8%. The company has also announced a £200 million share buyback and boosted its dividend 30% to 6.5 pence per share. Shares of Babcock have more than doubled this year, valuing the company at £5.22 billion, as geopolitical tensions boost military spending.

UK defense firm Babcock International Group has raised its medium-term profit target to an underlying operating margin of at least 9%, up from at least 8%. The company has also announced a £200 million share buyback and boosted its dividend 30% to 6.5 pence per share. Shares of Babcock have more than doubled this year, valuing the company at £5.22 billion, as geopolitical tensions boost military spending.

The company's latest announcement comes amidst a surge in military spending, driven by geopolitical tensions and increasing recognition of the need to invest in defense capabilities and energy security. According to CEO David Lockwood, "This is a new era for defense. There is increasing recognition of the need to invest in defense capability and energy security, both to safeguard populations and to drive economic growth."

The company's strong financial performance is reflected in its recent earnings report, which showed a 51% rise in statutory operating profit to £364 million for the year ended March 31, 2025. Revenue rose 11% on an organic basis to £4.8 billion, with growth in its Nuclear and Marine divisions cited as key drivers of the performance.

Babcock's share price has been on a strong uptrend, gaining 56.4% over a 12-week period and 17.7% over the past four weeks. The stock is currently trading at 96% of its 52-week high-low range, indicating potential for further price appreciation.

Investors looking to capitalize on Babcock's strong fundamentals and price trend may find the company a solid choice for trend investing. However, it is important to note that the key to a successful stock-picking strategy is to ensure that it produced profitable results in the past. The Zacks Research Wizard can help investors backtest the effectiveness of their strategy and explore successful stock-picking strategies.

References:
[1] https://www.nasdaq.com/articles/recent-price-trend-babcock-international-group-bckiy-your-friend-heres-why-0
[2] https://www.investing.com/news/earnings/babcock-profit-up-51-sets-200-mln-buyback-on-higher-nuclear-marine-revenue-4109534
[3] https://www.bloomberg.com/news/articles/2025-06-25/uk-defense-firm-babcock-raises-target-announces-share-buyback