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(Sharecast News) - JPMorgan Cazenove placed Babcock shares on 'positive catalyst watch' on Wednesday ahead of results on 25 June.
The bank said there is a good chance that Babcock sets new medium-term financial guidance with these results.
In addition, it said it sees Babcock "as one of the big winners" in the UK Strategic Defence Review (SDR) that was published on Monday.
"BAB should be able to highlight the opportunities from the SDR in its upcoming results meeting," it said.
"Our multiples-based Dec-26 price target of 1,280p implies circa 25% upside potential over the next 18 months."
JPM also noted that its YE March 25-27 estimated EPS is 7%/6%/5% above Vuma consensus.
It added that overweight-rated Babcock is one of the cheapest European defence stocks that it covers.
At 1040 BST, the shares were up 2.9% at 1,051.38p.
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