UK's Chemring FY26 adjusted EBIT slightly misses; to sell US Sensors business

Overview

• UK defence technology group's FY26 adjusted EBIT slightly missed analyst expectations

• Company reported record £1.4 bln order book and multiple strategic contract wins

• Initiated sale process for US Sensors business after strategic review

Outlook

• Chemring expects strong year-on-year earnings growth in FY27, supported by its order book

• Company says FY27 underlying operating profit to be more evenly weighted between H1 and H2

• Capacity expansion projects in Energetics expected to drive growth from 2027 and 2028

Result Drivers

• RECORD ORDER BOOK - Co said strong demand across core markets led to a record £1.4 bln order book at year-end

• CONTRACT AWARDS DELAYS - Roke’s FY26 performance was below expectations due to delays in defence contract awards, mainly from UK MOD and international customers

• SEGMENT PERFORMANCE - Countermeasures & Energetics segment performed strongly, while Roke saw record order intake despite contract delays

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 7 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the aerospace & defense peer group is "buy."

• Wall Street's median 12-month price target for Chemring Group PLC is GBp650.00, about 23.6% above its November 11 closing price of GBp526.00

• The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 25 three months ago

Reuters Recommended Reads

• Nov 11 - Arms producer CSG cuts margin outlook on ammunition prices, shares slump

• Nov 10 - UK's Avon Technologies FY26 adjusted profit beats estimates on strong demand, cost cuts

• Nov 10 - Germany's Helsing to unveil AI-based military software as a rival to Palantir

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)