Published on 26 Mar 2024 on Simply Wall St. via Yahoo Finance
Is Babcock International Group PLC (LON:BAB) Trading At A 34% Discount?
Key Insights
The projected fair value for Babcock International Group is UK£7.81 based on 2 Stage Free Cash Flow to EquityBabcock International Group is estimated to be 34% undervalued based on current share price of UK£5.14 The UK£5.36 analyst price target for BAB is 31% less than our estimate of fair value
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Babcock International Group PLC (LON:BAB) as an investment opportunity by taking the forecast future cash flows of the company and discounting them back to today's value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex.