Chemring (CHG) AI Stock Analysis

• Market Cap: £1.54B
• Dividend Yield: 1.66%
• Average Volume (3M): 1.05M
• Price to Earnings (P/E): 39.4
• Beta (1Y): 0.98
• Revenue Growth: 7.73%
• EPS Growth: 1209.76%
• Country: UK
• Employees: 2,672
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.07
• Shares Outstanding: 272,592,600
• 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: £611.75
• Price Target Upside: 30.02% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: 558.00p ▲(18.60% Upside)

Chemring's strong financial performance and positive earnings call are offset by bearish technical indicators and a high valuation. The company's strategic growth initiatives and robust order book support a positive long-term outlook, but current market conditions and valuation concerns weigh on the score.

Positive Factors

Record Order Book

A record order book indicates strong demand and future revenue visibility, supporting long-term growth and stability in the defense sector.

Strategic Expansion and Investment

Strategic investments in Energetics expand capabilities and market reach, enhancing competitive positioning and long-term growth potential.

Strong Performance in Countermeasures & Energetics

Robust growth in key segments indicates operational efficiency and market demand, supporting sustained profitability and competitive advantage.

Negative Factors

Weak Performance in Sensors & Information

Declines in Sensors & Information highlight vulnerabilities in product diversification and reliance on government contracts, impacting future growth.

Headwinds in Roke

Challenges in Roke's order intake suggest potential revenue pressures and the need for strategic adjustments to maintain profitability.

FX Headwinds

Foreign exchange headwinds can obscure true financial performance, affecting international competitiveness and financial stability.

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 generates revenue through the sale of its specialized products and services in the defense and security sectors. Key revenue streams include the production and supply of countermeasures, which protect military assets from missile threats, and detection systems that help in identifying explosives and chemical agents. The company benefits from long-term contracts with government defense agencies, which provide a steady stream of income. Additionally, Chemring engages in partnerships and collaborations with other defense contractors and technology firms, enhancing its product offerings and expanding its market reach. The company also invests in research and development to innovate and improve its products, ensuring competitiveness in a rapidly evolving defense landscape.

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: Negative
• Last Price: 470.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• 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 470.5 is below the 20-day moving average (MA) of 505.22, below the 50-day MA of 544.49, and below the 200-day MA of 495.13, indicating a bearish trend. The MACD of -21.51 indicates Positive momentum. The RSI at 27.15 is Positive, neither overbought nor oversold. The STOCH value of 22.47 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	76 Outperform	£2.52B	53.21	5.21%	1.36%	0.84%	-62.73%
CHG	69 Neutral	£1.54B	39.43	14.59%	1.66%	7.73%	1209.76%
AVON	66 Neutral	£570.89M	112.60	6.27%	0.97%	10.74%	237.07%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BA	61 Neutral	$47.41B	24.68	17.59%	2.12%	11.60%	8.03%
CHRT	61 Neutral	£592.27M	28.76	14.40%	1.52%	33.33%	19.01%
QQ	58 Neutral	£2.53B	-13.93	―	2.03%	-4.59%	-256.51%

Chemring Corporate Events

Chemring Group Reports Strong FY25 Performance and Strategic Developments

Chemring Group PLC announced its FY25 financial performance, reporting an adjusted operating profit in line with analyst expectations and a robust growth outlook. The company has secured significant contract wins, increasing its order book to £1.3bn, and is assessing strategic options for its Alloy Surfaces business, which will be reported as a discontinued operation. The acquisition of Landguard Group is expected to enhance Chemring’s Roke business, while the company continues to face challenges in its Sensors & Information sector due to delayed UK Government orders. The announcement highlights Chemring’s strong market positioning and ongoing demand for its defense capabilities, despite some sector-specific challenges.

The most recent analyst rating on (GB:CHG) stock is a Buy with a £638.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

Chemring Group Updates Capital Structure and Voting Rights

Chemring Group PLC has announced its capital structure as of October 31, 2025, which includes 272,592,592 ordinary shares with voting rights and 62,500 cumulative preference shares without voting rights, except in limited circumstances. This update is in line with the FCA’s Disclosure and Transparency Rule 5.6.1R, and shareholders can use the ordinary shares figure to assess their interests under these rules.

The most recent analyst rating on (GB:CHG) stock is a Buy with a £638.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

Chemring Appoints Deutsche Numis as Joint Corporate Broker

Chemring Group PLC has appointed Deutsche Numis as a joint corporate broker alongside Investec Bank plc, effective immediately. This strategic move is likely to enhance Chemring’s financial advisory capabilities, potentially strengthening its market position and providing better support for its stakeholders.

The most recent analyst rating on (GB:CHG) stock is a Buy with a £638.00 price target. To see the full list of analyst forecasts on Chemring stock, see the GB:CHG Stock Forecast page.

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.