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Chemring
(LSE:CHG)
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Rating:59Neutral
Price Target:
656.00 p
▲(19.16% Upside)
Action:Reiterated
Date:07/02/26
The score is primarily supported by solid profitability and a manageable balance sheet, but is held back by weakening revenue growth and notably pressured free cash flow. Technical signals are mixed with negative MACD and a weaker longer-term trend, and valuation is a meaningful drag due to the high P/E with only a modest dividend yield.
Positive Factors
Improved Profitability
Improving net profit, EBIT and EBITDA margins indicate stronger operating efficiency and provide a more resilient earnings base. If sustained, this can support internal investment and profitability across government-focused programs.
Negative Factors
Declining Revenue
Falling revenue points to weaker recent demand or contract timing and can limit operating leverage. Persistent top-line contraction would make it harder to sustain margin gains and grow Chemring’s defense technology business.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved Profitability
Improving net profit, EBIT and EBITDA margins indicate stronger operating efficiency and provide a more resilient earnings base. If sustained, this can support internal investment and profitability across government-focused programs.
Read all positive factors
Chemring (CHG) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£1.43B
Dividend Yield1.53%
Average Volume (3M)878.16K
Price to Earnings (P/E)43.3
Beta (1Y)1.40
Revenue Growth-3.99%
EPS Growth-22.35%
CountryUK
Employees2,700
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.12
Shares Outstanding272,126,800
10 Day Avg. Volume707,349
30 Day Avg. Volume878,161
Financial Highlights & Ratios
PEG Ratio1.11
Price to Book (P/B)4.06
Price to Sales (P/S)3.12
P/FCF Ratio-277.01
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£662.00Price Target Upside20.25% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)0.2
Revenue Forecast (FY)£550.06M
Chemring Business Overview & Revenue Model
Company Description
Chemring Group Plc engages in the manufacture of technology products and services for the aerospace, defense, and security markets. It operates through the following segments: Sensors & Information; and Countermeasures & Energetics. The Sensors & ...
How the Company Makes Money
Chemring makes money primarily by selling defense and security products and delivering related services under contracts with government customers (notably the UK Ministry of Defence and the U.S. Department of Defense), prime defense contractors, a...
Chemring Earnings Call Summary
Earnings Call Date:Dec 09, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Dec 15, 2026
Earnings Call Sentiment Positive
The earnings call indicated strong performance and growth potential, particularly in the Energetics segment with a record order book and improved operational efficiency. However, challenges remain in the Sensors & Information segment due to delays in government spending and increased costs in Norway. The company is confident in its long-term growth strategy.Positive Updates
Record Order Book and Strong Growth Projections
Order intake reached GBP 781 million, up 20% year-on-year, delivering another record order book of GBP 1.3 billion, up 32% since last year. The company aims to double annual revenue to GBP 1 billion by 2030.
Negative Updates
Challenges in Sensors & Information Segment
Revenue in Sensors & Information fell by 18% and operating profit decreased by 25%, due to delays in U.K. government spending and the prior year's benefits from JBTDS LRIP.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Order Book and Strong Growth Projections
Order intake reached GBP 781 million, up 20% year-on-year, delivering another record order book of GBP 1.3 billion, up 32% since last year. The company aims to double annual revenue to GBP 1 billion by 2030.
Read all positive updates
Company Guidance
During the call, Chemring reported a robust financial performance for the fiscal year ending October 31, 2025, despite short-term headwinds such as decreased U.K. government order placements. The company achieved a record order book of GBP 1.3 billion, up 32% year-on-year, with order intake rising 20% to GBP 781 million. Group revenue increased by 2% to GBP 498 million, and operating margin improved by 50 basis points to 14.8%. Earnings per share rose to 19.4p, and cash conversion was strong at 114%. The Countermeasures & Energetics segment saw a 17% revenue growth, with operating profit up 37% and margins increasing to 19.1%. Meanwhile, the Sensors & Information segment faced challenges, with revenue down 18% and operating profit falling 25%. Despite these challenges, operating margins were maintained at nearly 18%. The Board declared a final dividend of 5.3p, bringing the total dividend to 8p, up 3%. Looking ahead, Chemring is targeting significant growth in its Energetics and Sensors & Information segments, with strategic investments and acquisitions supporting its long-term revenue goal of GBP 1 billion by 2030.Chemring Financial Statement Overview
Summary
Income Statement
75
Positive
Balance Sheet
70
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 500.50M | 497.50M | 510.40M | 472.60M | 401.00M | 393.30M |
| Gross Profit | 485.30M | 497.50M | 510.40M | 472.60M | 401.00M | 393.30M |
| EBITDA | 95.00M | 100.20M | 82.70M | 67.10M | 71.20M | 75.50M |
| Net Income | 33.90M | 48.20M | 39.50M | 5.40M | 47.40M | 41.50M |
Balance Sheet | ||||||
| Total Assets | 908.10M | 863.10M | 692.10M | 596.40M | 620.10M | 531.50M |
| Cash, Cash Equivalents and Short-Term Investments | 44.70M | 65.30M | 45.00M | 6.40M | 19.80M | 5.80M |
| Total Debt | 189.20M | 154.30M | 97.70M | 20.80M | 27.00M | 32.30M |
| Total Liabilities | 539.40M | 481.10M | 335.80M | 217.90M | 202.00M | 178.70M |
| Stockholders Equity | 368.70M | 382.00M | 356.30M | 378.50M | 418.10M | 352.80M |
Cash Flow | ||||||
| Free Cash Flow | -13.50M | -5.60M | 11.40M | 31.70M | 46.00M | 45.50M |
| Operating Cash Flow | 76.00M | 84.60M | 81.00M | 65.90M | 80.50M | 75.70M |
| Investing Cash Flow | -92.60M | -85.70M | -47.60M | -39.40M | -30.50M | -34.90M |
| Financing Cash Flow | 2.70M | 43.30M | -37.30M | -40.20M | -35.80M | -50.40M |
Chemring Technical Analysis
Negative
550.50
Price Trends
572.10
Negative
540.43
Negative
521.68
Positive
Market Momentum
-14.76
Positive
30.45
Neutral
7.95
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:CHG, the sentiment is Negative. The current price of 550.5 is below the 20-day moving average (MA) of 582.89, below the 50-day MA of 572.10, and above the 200-day MA of 521.68, indicating a neutral trend. The MACD of -14.76 indicates Positive momentum. The RSI at 30.45 is Neutral, neither overbought nor oversold. The STOCH value of 7.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:CHG.
Chemring Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | £57.30B | 27.95 | 17.49% | 1.86% | 7.20% | 8.54% | |
69 Neutral | £2.47B | 24.36 | 19.34% | 2.27% | -0.47% | ― | |
67 Neutral | £4.86B | 23.33 | 31.57% | 0.76% | 7.17% | -14.18% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | £2.46B | 16.46 | 17.55% | 1.84% | 1.20% | 221.80% | |
59 Neutral | £1.43B | 43.30 | 9.03% | 1.53% | -3.99% | -22.35% | |
58 Neutral | £534.65M | 22.71 | 13.59% | 1.55% | 13.46% | 15.89% |
* Industrials Sector Average
GB:CHG
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Chemring Corporate Events
Business Operations and StrategyExecutive/Board Changes
Chemring Announces Board-Level Legal Leadership Transition
Neutral
Aug 14, 2026
Chemring Group PLC, a major provider of high-technology products and services for defence, security and aerospace markets, employs roughly 2,700 staff worldwide and operates plants in four countries. The group’s two core segments, Countermea...
Regulatory Filings and Compliance
Chemring director Michael Ord sells 200,000 shares
Neutral
Aug 5, 2026
Chemring Group PLC has disclosed that company director and person discharging managerial responsibilities, Michael Ord, sold 200,000 ordinary 1p shares on 4 August 2026 in London at an aggregated value of £1.22 million. Following the transact...
Regulatory Filings and Compliance
Chemring director Sarah Ellard trims shareholding in disclosed sale
Neutral
Aug 3, 2026
Chemring Group has disclosed that board director and PDMR Sarah Ellard sold 57,597 ordinary 1p shares in the company on 3 August 2026 in London at an average price of about 602p, raising approximately £347,000. Following the transaction, Ella...
Regulatory Filings and Compliance
Chemring Clarifies Voting Share Capital for Regulatory Disclosure
Positive
Aug 3, 2026
Chemring Group PLC has reported that, as of 31 July 2026, its issued share capital comprises 272,126,806 ordinary shares of 1p each with full voting rights and 62,500 cumulative preference shares that generally carry no voting rights. The company ...
Business Operations and StrategyExecutive/Board Changes
Chemring appoints Tom Newman as new chief executive as Michael Ord retires
Positive
Jul 30, 2026
Chemring has announced that long-serving Group Chief Executive Michael Ord will retire at the end of this year, marking the close of an eight-year tenure in which he oversaw significant transformation and strengthened the company’s market po...
Business Operations and Strategy
Chemring Wins Sole-Source US Contract for Biological Threat Detection Systems
Positive
Jul 1, 2026
Chemring’s US subsidiary, Chemring Sensors Electronic Systems, has secured a sole-source Indefinite Delivery/Indefinite Quantity full-rate production contract for the Joint Biological Tactical Detection System programme, with a ceiling valu...
Regulatory Filings and Compliance
Chemring updates market on current share capital and voting rights
Neutral
Jul 1, 2026
Chemring has reported that, as of 30 June 2026, its issued share capital comprises 272,126,806 ordinary shares carrying voting rights and 62,500 cumulative preference shares that generally carry no voting rights. The company highlighted that the o...
Business Operations and StrategyExecutive/Board Changes
Chemring Nobel taps former Kongsberg chief Geir Håøy as chair amid major growth push
Positive
Jun 30, 2026
Chemring Nobel, the Norwegian subsidiary of Chemring Group, has appointed veteran defence-industry executive Geir Håøy, former CEO of Kongsberg Gruppen, as Chair of its Board effective 1 July 2026, succeeding long-serving chair Sarah Ell...
Regulatory Filings and Compliance
Chemring Director Alpna Amar Buys 10,000 Shares in Insider Deal
Positive
Jun 26, 2026
Chemring Group PLC disclosed that director and PDMR Alpna Amar has purchased 10,000 ordinary 1p shares in the company at a price of 474.18p per share. The transaction, conducted on 26 June 2026 on the London Stock Exchange, signals a modest vote o...
Regulatory Filings and Compliance
Chemring director Tony Wood increases stake with 42,000-share purchase
Positive
Jun 26, 2026
Chemring Group PLC disclosed that director and person discharging managerial responsibilities Tony Wood has acquired 42,000 ordinary 1p shares in the company on 26 June 2026. The transaction, executed on the London Stock Exchange at a price of 473...
Business Operations and Strategy
Chemring Revives Alloy Surfaces After $345m U.S. Defence Decoy Awards
Positive
Jun 25, 2026
Chemring has secured two major agreements with the U.S. Department of War that will restart sustained manufacturing at its Alloy Surfaces pyrophoric airborne decoys business in Philadelphia. The unit, previously classified as a discontinued operat...
Business Operations and StrategyDelistings and Listing ChangesRegulatory Filings and Compliance
Chemring closes out shares reserved under 2018 UK Sharesave block listing
Positive
Jun 18, 2026
Chemring Group has confirmed that all options granted under its 2018 UK Sharesave Plan were either exercised or lapsed as of 30 July 2020. As a result, there are no remaining 1p ordinary shares to be issued from the block listing of 812,457 shares...
Business Operations and StrategyRegulatory Filings and Compliance
Chemring reports limited share issuance under 2018 Sharesave Plan in latest blocklisting return
Neutral
Jun 18, 2026
Chemring has filed a series of blocklisting six‑monthly returns detailing the status of multiple tranches under its 2018 UK Sharesave Plan, covering options granted between 2021 and 2025. Across these tranches, only modest numbers of 1p ordi...
Executive/Board Changes
Chemring Launches Search as Long-Serving Legal Director Plans 2027 Retirement
Neutral
Jun 2, 2026
Chemring Group PLC has announced that Group Legal Director and Company Secretary Sarah Ellard will retire in 2027, after more than three decades with the company and over a decade on its board. The board has begun a formal search for her successor...
Business Operations and StrategyDividendsFinancial Disclosures
Chemring lifts revenue and order book as defence demand fuels record backlog
Positive
Jun 2, 2026
Chemring reported interim results in line with expectations for the six months to 30 April 2026, highlighting a record order book of £1.4bn that provides strong medium-term revenue visibility. Revenue rose 6.5% to £237.3m with an operati...
Regulatory Filings and Compliance
Chemring Updates Share Capital and Voting Rights Reference Total
Neutral
Jun 1, 2026
Chemring Group PLC has confirmed that, as of 31 May 2026, its share capital comprises 272,126,806 ordinary shares carrying voting rights and 62,500 cumulative preference shares that generally carry no voting rights. The updated voting share total ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.