Chemring, the Industrials sector company, was revisited by a Wall Street analyst today. Analyst David Farrell from Jefferies maintained a Buy rating on the stock and has a p530.00 price target.
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David Farrell has given his Buy rating due to a combination of factors influencing Chemring’s performance. Despite a mixed trading update, the company’s EBITA is projected to align with market expectations, and EPS is anticipated to surpass them, once adjustments for discontinued operations are made. The discontinuation of the US Alloy Surfaces Company, which is expected to incur a loss, contrasts with the prior year’s profit, reflecting a decrease in demand from the US following military withdrawals from Afghanistan and Iraq.
Additionally, while the Sensors & Information segment faces challenges with a weaker order flow, the Energetics division is performing better than expected, which is likely to sustain into the next year. This strong performance in Energetics supports the maintenance of FY26 forecasts. The order intake and order book have shown significant growth compared to the previous year, indicating robust demand and providing a solid foundation for future growth. These elements collectively underpin Farrell’s optimistic outlook on Chemring’s medium to long-term prospects, justifying the Buy rating.
Based on the recent corporate insider activity of 10 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of CHG in relation to earlier this year.