Babcock International shares showing significant potential
A beneficiary of the current boom in defence spending, this mid-cap stock trades at prices not seen in over five years. Independent analyst Alistair Strang studies potential for even bigger gains.
11th March 2025 07:56
by Alistair Strang from Trends and Targets
When we previously reviewed Babcock International Group (LSE:BAB) in 2021, we provided some quite horrific criteria for a scenario which arithmetically would culminate in a bottom around 55p. Perhaps due to the period of geopolitical instability, their share price managed to wander in quite a different direction, the years since showing significant recovery from the two-quid point at which we reviewed them. By “normal” criteria, the share price now trading around 700p is showing some significant potentials for the future.
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Currently, above just 720p risks triggering a share price launch in the direction of 830p next with our secondary, if bettered, a longer-term 1,042p. As the chart below shows, such ambitions make a lot of visual sense, surprising but also quite encouraging for the longer term.
From a chart perspective, Babcock certainly produces an optimistic picture, their price being gapped above the long-term downtrend since 2014, achieving an official “higher high” above the pre-pandemic spike at the start of 2020. Generally, it's where a share which can be usually safely assumed to be in safe recovery territory.
Due to the fragility of peace and stability, it’s probably accurate to assume the defence industry shall always win, but some caution is suggested. After all, the share price need only close below 572p to ruin our hopes for the future.
Source: Trends and Targets. Past performance is not a guide to future performance.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.
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