Chemring (CHG) AI Stock Analysis

• Market Cap: £1.36B
• Dividend Yield: 1.64%
• Average Volume (3M): 1.05M
• Price to Earnings (P/E): 32.2
• Beta (1Y): 1.00
• Revenue Growth: -2.53%
• EPS Growth: 22.25%
• Country: UK
• Employees: 2,672
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.13
• Shares Outstanding: 272,123,400
• 10 Day Avg. Volume: 771,588
• 30 Day Avg. Volume: 1,046,652
• PEG Ratio: 1.13
• Price to Book (P/B): 4.06
• Price to Sales (P/S): 3.12
• P/FCF Ratio: -277.01
• 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: £625.00
• Price Target Upside: 24.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 0.2
• Revenue Forecast (FY): £547.24M

• Rating: 63 Neutral
• Price Target: 556.00 p ▲(10.54% Upside)
• Action: Reiterated Date: 12/20/25
• Date: Action: Reiterated 12/20/25

Chemring's overall stock score reflects strong financial performance and positive earnings call insights, particularly in the Energetics segment. However, bearish technical indicators and a high P/E ratio suggest caution. The company's long-term growth strategy and record order book are positive, but cash flow challenges and valuation concerns weigh on the score.

Positive Factors

Order Book and Backlog

A GBP1.3bn record order book with GBP781m intake provides multi‑year revenue visibility from contracted defence work. Large backlog underpins predictable cashflows, supports capacity planning and reduces near‑term revenue cyclicality inherent in defence procurement.

Strong Profitability and Margins

Exceptionally high gross margin and rising operating margins indicate durable cost control and pricing power in core products. Sustained profitability improves reinvestment capacity and resilience to budget variability in government customers over the medium term.

Cash Generation / Conversion

Strong cash conversion and an OCF-to-net-income ratio above 1 signal that reported earnings translate into actual cash. This enhances financial flexibility to fund working capital, dividends, strategic M&A and capital projects without immediate reliance on external financing.

Negative Factors

Sensors & Information Underperformance

A sharp decline in the Sensors & Information segment reduces diversification and growth optionality. Reliance on government timing and the loss of prior JBTDS LRIP benefits expose the company to contract timing risk and could depress group growth and margins for multiple quarters.

Negative Free Cash Flow Trend

A large drop in free cash flow growth signals potential strain on liquidity and funding for reinvestment or acquisitions. Even with solid operating cash, sustained negative FCF trends may force higher external financing or constrain capital allocation flexibility over the medium term.

Rising Project and Infrastructure Costs

Material cost increases on Norwegian infrastructure work raise project execution risk and capital needs. Higher-than-expected project costs can erode margins, delay returns on investment and necessitate additional cash or contingency provisions, pressuring medium‑term profitability.

Chemring Business Overview & Revenue Model

Company Description

Chemring Group PLC supplies countermeasures, sensors, and energetic solutions to aerospace, defense, and security industries in the United States, the United Kingdom, Norway, Australia, and internationally. The company operates through two segments, Sensors & Information and Countermeasures & Energetics. The Sensors & Information segment develops and manufactures explosive hazard detection equipment; chemical and biological threat detection equipment; and electronic countermeasures, as well as network protection technologies. The Countermeasures & Energetics segment offers expendable countermeasures for air, sea, and land platforms; cartridge/propellant actuated devices; pyrotechnic devices for satellite launch and deployment; missile components; separation sub-systems; actuators; and energetic materials, as well as aircrew egress and safety systems. Chemring Group PLC was incorporated in 1905 and is headquartered in Romsey, the United Kingdom.

How the Company Makes Money

Chemring makes money primarily by designing, manufacturing, and selling defence products and by providing related services to government and prime defence contractor customers. A major revenue stream comes from its Countermeasures business, which sells expendable defensive products (such as decoys and flares) used to protect platforms like aircraft and naval vessels; revenues are generated through multi-year procurement contracts and repeat orders driven by training use and stock replenishment. A second core revenue stream comes from Sensors & Information, which earns revenue from supplying sensing, detection, and electronic warfare-related products and systems, as well as associated engineering and technical services that can include integration, support, and lifecycle activities tied to deployed capabilities. Across both areas, earnings are typically underpinned by contract-based work with defence customers, where demand is influenced by defence budgets, operational requirements, fleet/platform upgrades, and ongoing sustainment needs. Specific significant partnerships or customer concentration details are not available (null).

Chemring Financial Statement Overview

Summary

Chemring shows strong profitability with high margins and a healthy return on equity. However, the decline in revenue growth and negative free cash flow growth are concerning, indicating potential cash flow challenges despite a stable balance sheet.

Income Statement

Chemring's income statement shows a strong gross profit margin of 100%, indicating efficient cost management. However, the revenue growth rate has declined by 4.57% in the latest year, which is a concern. The net profit margin improved to 9.69%, showing enhanced profitability. EBIT and EBITDA margins have also improved, reflecting better operational efficiency.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 0.40, indicating manageable leverage. Return on equity is healthy at 12.62%, suggesting effective use of equity capital. The equity ratio stands at 44.26%, showing a stable financial structure with a good proportion of equity financing.

Cash Flow

Cash flow analysis indicates a significant decline in free cash flow, with a negative growth rate of 184.85%. The operating cash flow to net income ratio is 1.76, suggesting strong cash generation relative to net income. However, the negative free cash flow to net income ratio highlights potential cash flow challenges.

Breakdown	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	497.50M	510.40M	472.60M	401.00M	393.30M
Gross Profit	497.50M	510.40M	472.60M	401.00M	393.30M
EBITDA	100.20M	82.70M	67.10M	71.20M	75.50M
Net Income	48.20M	39.50M	5.40M	47.40M	41.50M
Balance Sheet
Total Assets	863.10M	692.10M	596.40M	620.10M	531.50M
Cash, Cash Equivalents and Short-Term Investments	65.30M	45.00M	6.40M	19.80M	5.80M
Total Debt	154.30M	97.70M	20.70M	26.90M	32.30M
Total Liabilities	481.10M	335.80M	217.90M	202.00M	178.70M
Stockholders Equity	382.00M	356.30M	378.50M	418.10M	352.80M
Cash Flow
Free Cash Flow	-5.60M	11.40M	31.70M	46.00M	45.50M
Operating Cash Flow	84.60M	81.00M	65.90M	80.50M	75.70M
Investing Cash Flow	-85.70M	-47.60M	-39.40M	-30.50M	-34.90M
Financing Cash Flow	43.30M	-37.30M	-40.20M	-35.80M	-50.40M

Chemring Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 503.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 Negative. The current price of 503 is below the 20-day moving average (MA) of 527.42, below the 50-day MA of 519.11, and below the 200-day MA of 528.66, indicating a bearish trend. The MACD of 3.23 indicates Positive momentum. The RSI at 40.34 is Neutral, neither overbought nor oversold. The STOCH value of 37.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:CHG.

Chemring Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SRP	79 Outperform	£2.99B	19.41	16.69%	1.27%	0.84%	-62.73%
CHRT	74 Outperform	£570.93M	24.99	11.27%	1.58%	23.91%	-14.66%
BA	71 Outperform	£65.59B	24.91	17.90%	1.99%	11.60%	8.03%
BAB	68 Neutral	£6.34B	9.88	43.22%	0.56%	7.36%	48.93%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
CHG	63 Neutral	£1.36B	32.18	13.12%	1.64%	-2.53%	22.25%
QQ	58 Neutral	£2.49B	20.00	―	2.00%	-4.59%	-256.51%

Chemring Corporate Events

Chemring appoints Baroness Kate Rock as senior independent director to bolster growth strategy

Chemring Group has appointed Baroness Kate Rock as an independent non-executive director, effective 1 April 2026, and she will also serve as Senior Independent Director and sit on the Audit, Nomination and Remuneration Committees. The move brings to Chemring a board member with extensive experience across technology, engineering, construction and infrastructure, as well as a strong track record in corporate strategy, government engagement and innovation oversight.

Rock currently chairs Costain Group, where her tenure has coincided with a sharp share price recovery and a return to the FTSE 250, and she is Senior Independent Director at Keller Group with broad committee responsibilities. Chemring’s chair Tony Wood said her expertise in infrastructure and technology will support the group’s organic growth strategy and capacity investments, suggesting her appointment is intended to strengthen governance and bolster Chemring’s strategic positioning in its niche defence and security markets.

The most recent analyst rating on (GB:CHG) stock is a Hold with a £553.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

Chemring Updates Share Capital and Voting Rights for Disclosure Purposes

Chemring Group has confirmed that, as of 28 February 2026, its issued share capital comprises 272,123,407 ordinary shares carrying voting rights and 62,500 cumulative preference shares that generally do not carry voting rights. The updated share count provides investors with the denominator required to assess whether their holdings trigger disclosure obligations under the FCA’s transparency rules, helping maintain regulatory compliance and market transparency for Chemring’s shareholder base.

The most recent analyst rating on (GB:CHG) stock is a Hold with a £569.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

Chemring Wins Strong Shareholder Backing as All AGM Resolutions Pass

Chemring Group PLC reported that all resolutions put to shareholders at its annual general meeting on 20 February 2026 were approved by poll, with support levels generally above 90% on most items. Approximately 68% of the company’s issued share capital was voted, indicating solid shareholder engagement across both ordinary and special resolutions.

The adoption of all 19 resolutions, including both ordinary and special business, secures continuity for Chemring’s current governance, capital and corporate authorities for the coming year. The broad backing reinforces board proposals and provides management with a clear mandate from investors as the company continues to execute its strategy in the defence and security sector.

The most recent analyst rating on (GB:CHG) stock is a Buy with a £660.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

Chemring holds FY26 outlook as record order book offsets slow start and UK defence delays

Chemring said its fiscal 2026 outlook remains in line with board expectations despite a slightly slower start to the year, as it reported a record £1.364bn order book and 85% revenue cover from first-quarter revenues and existing contracts. The company continues to benefit from rising defence spending across NATO and allies, though first-quarter order intake fell sharply year on year after a strong prior period of multi-year wins.

Operationally, Chemring is consolidating production at its automated Kilgore Flares facility in the U.S., a move expected to trigger a non-cash impairment but improve efficiency, while also pushing ahead with significant debt-funded investment to expand Energetics capacity. The group highlighted ongoing UK market disruption from delayed defence planning but noted improving order intake, new multi-year countermeasures contracts and progress at Roke, and it confirmed a board transition as its senior independent director steps down with an interim replacement appointed.

The most recent analyst rating on (GB:CHG) stock is a Hold with a £558.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

Chemring Confirms Share Capital and Voting Rights for FCA Disclosure Purposes

Chemring Group PLC has confirmed that, as of 31 January 2026, its issued share capital comprises 272,122,862 ordinary shares of 1p each carrying voting rights and 62,500 cumulative preference shares that generally carry no voting rights except in limited circumstances. The company noted that the total number of voting ordinary shares will serve as the reference denominator for investors assessing whether they must disclose holdings or changes in their interests under the FCA’s Disclosure and Transparency Rules, reinforcing transparency requirements for Chemring’s shareholder base and supporting regulatory compliance in the UK market.

The most recent analyst rating on (GB:CHG) stock is a Hold with a £550.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

Chemring Director Mortensen Shifts Shareholding Into ISA With No Change in Stake

Chemring Group PLC disclosed that board director and PDMR James Mortensen has carried out a reorganisation of his personal shareholding, selling 44,615 ordinary shares and repurchasing the same number of shares into his Individual Savings Account. The transactions, both executed on 22 January 2026 on the London Stock Exchange at average prices of 534.00p and 536.34p respectively, leave Mortensen’s beneficial interest unchanged at 100,702 shares, representing 0.04% of Chemring’s issued share capital, indicating an administrative move rather than a change in overall executive exposure to the stock.

The most recent analyst rating on (GB:CHG) stock is a Hold with a £550.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

Chemring Publishes 2025 Annual Report and Calls 2026 AGM

Chemring Group PLC has published its 2025 Annual Report and Accounts, together with the notice and proxy materials for its 2026 Annual General Meeting, following the release of preliminary results for the year ended 31 October 2025. The AGM will be held on 20 February 2026 at the offices of Investec Bank in London, and all relevant documents are now available on the company’s website and via the UK Financial Conduct Authority’s National Storage Mechanism, underscoring Chemring’s adherence to regulatory disclosure requirements and providing shareholders with the information needed to exercise their governance rights.

The most recent analyst rating on (GB:CHG) stock is a Hold with a £496.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

Chemring Confirms Share Capital and Voting Rights as of Year-End 2025

Chemring Group PLC has confirmed that, as of 31 December 2025, its issued share capital comprises 272,118,314 ordinary shares of 1p each with voting rights and 62,500 cumulative preference shares that carry no voting rights except in limited circumstances. The company stated that the total number of voting ordinary shares should be used by investors as the reference figure for calculating whether they are required to disclose holdings or changes in holdings under the UK Financial Conduct Authority’s disclosure and transparency rules, providing clarity for shareholders and the market on Chemring’s current voting rights base.

The most recent analyst rating on (GB:CHG) stock is a Hold with a £496.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.