Numis Securities gave a knock to Babcock International Group PLC (LON:BAB) shares on Friday, downgrading its rating for the marine, aviation and nuclear engineer to ‘add’ from ‘buy’ after reducing its target price and estimates following recent results.
In a note to clients, Numis’ analysts said: “Although Babcock's FY19 results were in line with the (reduced) expectations set out at the February trading update, the scale of revenue and profit attrition indicated in the company's FY20 guidance surprised.”
READ: Babcock International profits less buoyant than expected
They downgraded their full-year 2020/21 underlying earnings (EBITA) forecasts for Babcock by 10%-11% to £513mln and £533mln respectively, taking the estimates towards the bottom of the market consensus range.
The analysts added: “The Capital Markets Day outlined a number of sensible, if somewhat unexciting, medium term targets, but delivery is needed to justify a sustained re-rating.
The Numis analysts reduced their price target for Babcock to 550p, with the shares in morning trade down 1.6% to 465.10p.