June 5, 2019 / 8:52 AM / 20 days ago

BUZZ-Babcock: Rises; co sees 3%-4% earnings growth in medium term

** Shares of British engineering services group Babcock are up 3.7%

** Babcock, whose biggest customer is Britain’s Ministry of Defence, says it is targeting earnings growth of 3% to 4% in medium term after warning last month that it expected revenue and profit to fall in 2019/2020

** Jefferies: “After a prolonged period of negative estimate momentum, the market is trying to assess whether the recent downgrade to FY20F EBITA guidance forms a solid base to deliver these medium-term trend growth targets”

** Liberum: “We see this as a very positive statement, although after a number of small warnings, it will take time for Babcock to re-build its credibility.. Ruth Cairnie, the new Chairman, is in listening mode at the moment”

** Co said last month underlying profit before tax is expected to fall by up to 12% in 2019/2020 and underlying revenue to fall to around 4.9 billion pounds in 2019/2020

** Stock is among top gainers on FTSE midcap (Reporting by Justin George Varghese in Bengaluru)

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