Chemring (CHG) AI Stock Analysis

• Market Cap: £1.54B
• Dividend Yield: 1.38%
• Average Volume (3M): 1.05M
• Price to Earnings (P/E): 39.6
• Beta (1Y): 0.98
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: UK
• Employees: 2,672
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.07
• Shares Outstanding: 272,219,850
• 10 Day Avg. Volume: 771,588
• 30 Day Avg. Volume: 1,046,652
• PEG Ratio: 0.04
• Price to Book (P/B): 2.72
• Price to Sales (P/S): 1.90
• P/FCF Ratio: 84.97
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 73 Outperform
• Price Target: 638.00p ▲(11.34% Upside)

Chemring's strong financial performance and positive earnings call are the primary drivers of its stock score. The company's robust order book and strategic investments support a positive outlook. However, the high P/E ratio and challenges in cash flow management and certain segments temper the overall score.

Positive Factors

Record Order Book

A record order book provides a strong foundation for future revenue, indicating sustained demand and long-term customer relationships, enhancing financial stability.

Strong Performance in Countermeasures & Energetics

The robust growth in this segment underscores Chemring's competitive edge and operational efficiency, supporting margin sustainability and long-term profitability.

Strategic Expansion and Investment

Significant investment in expansion projects indicates a commitment to growth and innovation, positioning Chemring to capitalize on future market opportunities.

Negative Factors

Weak Performance in Sensors & Information

Declines in this segment highlight vulnerabilities to government spending fluctuations, potentially impacting revenue diversification and growth stability.

Headwinds in Roke

Challenges in Roke's order intake may necessitate cost adjustments, impacting operational efficiency and potentially delaying strategic initiatives.

Cash Flow Challenges

Limited free cash flow generation could constrain financial flexibility, affecting the company's ability to invest in growth opportunities and manage debt.

Chemring Business Overview & Revenue Model

Company Description

Chemring Group plc is a global leader in advanced technology solutions, specializing in the defense, security, and aerospace sectors. The company operates through various segments, including Countermeasures, Sensors, and Energetics, providing a diverse range of products and services such as munitions, electronic warfare systems, and safety solutions. Chemring is renowned for its innovative approach to developing high-performance solutions that enhance safety and operational effectiveness in complex environments.

How the Company Makes Money

Chemring generates revenue primarily through the sale of defense and security products to military and government clients worldwide. Its key revenue streams include sales from its Countermeasures segment, which involves the production of flares and decoys for aircraft, and its Sensors segment, which offers advanced detection and monitoring systems. The company also benefits from long-term contracts with defense ministries and partnerships with key industry players, contributing to stable income. Additionally, Chemring invests in research and development to create cutting-edge technologies, further expanding its market reach and driving revenue growth through innovative product offerings.

Chemring Financial Statement Overview

Summary

Chemring has shown strong financial performance with consistent revenue growth and robust profit margins. The balance sheet is stable with manageable debt levels, but cash flow management presents challenges, particularly in free cash flow generation.

Income Statement

Chemring has demonstrated strong financial performance with consistent revenue growth, evidenced by a 7.99% increase from 2023 to 2024. Gross profit margins remain robust at 100% due to the nature of the data. The EBIT margin improved to 11.38%, and the EBITDA margin to 16.20%, reflecting efficient operational management. However, the net profit margin of 7.74% suggests room for optimizing expenses or cost management.

Balance Sheet

The company's balance sheet shows a stable financial position with an improved debt-to-equity ratio of 0.27, indicating manageable leverage levels. The equity ratio stands at 51.47%, showing a solid equity base. Return on equity (ROE) is decent at 11.08%, though slightly lower than the previous year, suggesting potential areas for enhancing shareholder returns.

Cash Flow

Chemring's cash flow performance highlights some challenges, with a significant decrease in free cash flow from 2023 to 2024. The operating cash flow to net income ratio is strong at 2.05, indicating good cash generation relative to profits. However, the free cash flow to net income ratio of 0.29 suggests that capital expenditures might be impacting free cash flow generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	521.30M	510.40M	472.60M	401.00M	393.30M	402.50M
Gross Profit	521.30M	510.40M	472.60M	401.00M	393.30M	402.50M
EBITDA	98.20M	82.70M	67.10M	71.20M	75.50M	75.10M
Net Income	43.50M	39.50M	5.40M	47.40M	41.50M	34.70M
Balance Sheet
Total Assets	755.10M	692.10M	596.40M	620.10M	531.50M	541.40M
Cash, Cash Equivalents and Short-Term Investments	22.60M	45.00M	6.40M	19.80M	5.80M	14.70M
Total Debt	115.80M	97.70M	20.70M	26.90M	32.30M	62.80M
Total Liabilities	402.60M	335.80M	217.90M	202.00M	178.70M	211.80M
Stockholders Equity	352.50M	356.30M	378.50M	418.10M	352.80M	329.60M
Cash Flow
Free Cash Flow	6.60M	11.40M	31.70M	46.00M	45.50M	35.10M
Operating Cash Flow	77.80M	81.00M	65.90M	80.50M	75.70M	75.90M
Investing Cash Flow	-45.70M	-47.60M	-39.40M	-30.50M	-34.90M	-25.40M
Financing Cash Flow	-3.20M	-37.30M	-40.20M	-35.80M	-50.40M	-32.10M

Chemring Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 573.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:CHG, the sentiment is Positive. The current price of 573 is above the 20-day moving average (MA) of 567.75, above the 50-day MA of 562.54, and above the 200-day MA of 473.29, indicating a bullish trend. The MACD of 2.83 indicates Negative momentum. The RSI at 52.57 is Neutral, neither overbought nor oversold. The STOCH value of 50.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:CHG.

Chemring Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SRP	―	£2.53B	53.21	5.21%	1.39%	0.84%	-62.73%
CHG	―	£1.54B	39.57	―	1.38%	―	―
CHRT	―	£611.44M	29.73	14.40%	1.22%	33.33%	19.01%
BA	―	$54.65B	28.43	17.59%	1.82%	11.60%	8.03%
AVON	―	£563.76M	113.30	4.18%	0.97%	14.69%	―
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
QQ	―	£2.55B	-14.04	-23.92%	1.85%	1.02%	-240.44%

Chemring Corporate Events

Chemring Group PLC Updates Shareholders on Capital Structure

Chemring Group PLC announced its capital structure as of September 30, 2025, which includes 272,219,856 ordinary shares with voting rights and 62,500 cumulative preference shares without voting rights. This information is crucial for shareholders to determine their notification requirements under the FCA’s Disclosure and Transparency Rules.

The most recent analyst rating on (GB:CHG) stock is a Buy with a £583.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

Chemring Director Increases Stake with Share Purchase

Chemring Group PLC announced that Pete Raby, a director of the company, has purchased 6,000 ordinary shares at an average price of 543.519p per share. This transaction, conducted on the London Stock Exchange, highlights a significant personal investment by a key company executive, which may indicate confidence in the company’s future performance and prospects.

The most recent analyst rating on (GB:CHG) stock is a Buy with a £583.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

Chemring Group PLC Announces Capital Structure and Voting Rights

Chemring Group PLC has announced its capital structure as of August 31, 2025, comprising 272,212,161 ordinary shares with voting rights and 62,500 cumulative preference shares without voting rights, except in specific circumstances. This information is crucial for shareholders to determine their notification obligations under the FCA’s Disclosure and Transparency Rules, impacting their stake and interest in the company.

The most recent analyst rating on (GB:CHG) stock is a Buy with a £583.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

Chemring Group Expands Market Presence with New Share Listing

Chemring Group PLC has applied for a blocklisting of 445,049 ordinary shares to be admitted to the London Stock Exchange. This move, linked to the exercise of employee share options under the Chemring Group 2018 UK Sharesave Plan, is expected to enhance the company’s market presence and provide liquidity options for its stakeholders.

The most recent analyst rating on (GB:CHG) stock is a Buy with a £670.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.