Chemring (CHG) AI Stock Analysis

• Market Cap: £1.28B
• Dividend Yield: 1.64%
• Average Volume (3M): 1.05M
• Price to Earnings (P/E): 26.5
• Beta (1Y): 0.93
• 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: 271,835,880
• 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: £611.75
• Price Target Upside: 29.61% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: 496.00p ▲(5.08% Upside)

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

Record Order Book

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

Energetics Segment Growth

The growth in the Energetics segment highlights Chemring's competitive advantage and ability to capitalize on increasing defense spending.

Operational Efficiency

Improved operational efficiency and strong cash conversion enhance profitability and financial health, supporting sustainable growth.

Negative Factors

Revenue Decline in Sensors & Information

Declining revenue in the Sensors & Information segment indicates challenges in diversification and reliance on government contracts.

Higher Infrastructure Costs

Rising infrastructure costs can pressure margins and delay projects, impacting profitability and strategic initiatives.

Negative Free Cash Flow Growth

Negative free cash flow growth suggests potential liquidity issues, limiting Chemring's ability to invest in growth opportunities.

Chemring Business Overview & Revenue Model

Company Description

Chemring Group PLC (CHG) is a UK-based defense and security company that specializes in providing advanced technology solutions for military and commercial applications. The company operates primarily through two segments: Countermeasures and Sensors. Its core products include countermeasures for defense systems, munitions, explosives, and detection systems for explosives and chemical agents, catering to various governmental and commercial clients worldwide.

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 demonstrated 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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 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: 472.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 472 is below the 20-day moving average (MA) of 475.02, below the 50-day MA of 512.63, and below the 200-day MA of 502.69, indicating a bearish trend. The MACD of -10.48 indicates Negative momentum. The RSI at 41.00 is Neutral, neither overbought nor oversold. The STOCH value of 47.86 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	73 Outperform	£2.76B	58.03	5.21%	1.27%	0.84%	-62.73%
CHRT	69 Neutral	£421.49M	22.21	13.24%	1.58%	23.91%	-14.66%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
CHG	63 Neutral	£1.28B	26.52	14.44%	1.64%	-2.53%	22.25%
BA	61 Neutral	£49.90B	25.99	17.59%	1.99%	11.60%	8.03%
QQ	58 Neutral	£2.33B	-11.57	―	2.00%	-4.59%	-256.51%
AVON	53 Neutral	£535.25M	68.19	6.27%	1.02%	10.74%	237.07%

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.