Barclays reiterates 'overweight' on Chemring, spies entrypoint into shares
Chemring Group
344.00p
17:05 19/04/24
Analysts at Barclays Research reiterated their 'overweight' stance on stock of Chemring following the tragic incident at the firm's countermeasures facility near Salisbury on 13 August.
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17:10 19/04/24
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4,296.41
17:08 19/04/24
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6,331.12
17:04 19/04/24
Their updated estimates for the rate of growth in th company's earnings per share in 2018 to 2020 were -29%, +1% and +2%, respectively, but they believed the 12% drop in the shares on the day following the announcement had been an "over-correction".
Indeed, they believed it afforded investors with an entry-point into a business with "strong" niche positions and self-help potential.
Changing hands on a 2019 price-to-earnings multiple of 15.0 and trading on an EV/EBIT multiple of 10.0, the shares did not look expensive, they said, adding that "these near-term multiples seem to overlook future self-help and mix improvement".
However, they did trim their target price by seven pence to 258p in order to better reflect on-going incident risk.