Reckitt (LSE: RKT), 3i Group (LSE: III), and Babcock International (LSE: BAB) have all suffered significant share price declines, yet each retains compelling long-term investment characteristics.
Consumer goods giant Reckitt reaches more than 30 million people daily across nearly 200 countries through brands including Dettol, Finish, Nurofen, and Durex.
The company was long regarded as one of the more dependable blue-chip income and growth stocks before its acquisition of Mead Johnson Nutrition in 2017 triggered a wave of costly US lawsuits over premature baby formula.
Adjusted operating profits have remained broadly flat in recent years, edging from £3.11bn in 2021 to £3.54bn in 2025, suggesting underlying resilience despite the legal headwinds.
The Reckitt share price is down 30% over five years, and recent Iran war concerns alongside a soft consumer outlook have pushed the stock lower again after a period of modest recovery.
At a price-to-earnings ratio of 12.6 and a dividend yield of 4.75%, the valuation looks modest for a business of Reckitt’s global scale and brand strength.
Private equity specialist 3i Group built its reputation by acquiring businesses, improving their operations, and selling them on for a profit, a model that served investors well for decades.
Discount retailer Action has since grown into a pan-European giant with more than 3,300 stores, now accounting for 70% of the 3i portfolio and leaving the investment trust highly exposed to any slowdown in that single holding.
3i shares have fallen 50% in a year, making it the worst performer on the entire FTSE 100 over that period, despite the group delivering a 22% return on shareholder funds.
The investment trust currently trades at a 30% discount to the underlying value of its assets, which may represent an opportunity for investors comfortable with continued short-term volatility.
Babcock International surged as defence spending enthusiasm swept through equity markets, pushing its price-to-earnings ratio close to 30 before a sharp 25% correction over the past three months.
A £140m cost overrun on its Type 31 frigate programme contributed to the pullback, alongside some profit-taking from investors who had enjoyed the earlier rally.
The P/E ratio has since come down to 20, a more reasonable level given the defence sector’s strong structural tailwinds and Babcock’s significant contract base.
Babcock’s latest trading update showed underlying operating profit rising 19% to £433m, while free cash flow jumped 71% to £262m, pointing to genuine operational momentum beneath the share price turbulence.
The company carries an order backlog of £9.6bn, roughly twice last year’s revenue, providing substantial earnings visibility for the years ahead.
All three companies carry individual risks, from Reckitt’s legal liabilities to 3i’s concentration in Action and Babcock’s contract execution challenges, but each offers a credible long-term investment case at current valuations.