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Chemring Group shares up as Barclays upgrades rating to ‘overweight’

Barclays has also increased its price target to 266p

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In morning trading, Chemring Group’s shares rose 5.2% to 231.50p

Shares in defence contractor Chemring Group PLC (LON:CHG) jumped as Barclays upgraded its rating to ‘overweight’ from ‘equal weight’.

Barclays also increased its price target to 266p, as its move to a discounted cash flow (DCF) based valuation gives more credit for medium-term improvements.

READ: Chemring Group surges on back of improved showing from its Countermeasures division

In a note to clients, analysts at Barclays said they think that concern over the extent of end-market recovery and the level of major contract wins/losses overlooks the central tenet of the investments case: the self-help opportunity.

The analysts said: “Management is targeting 300basis point margin expansion on a like-for like basis by financial year 2022 versus financial year 2017 and we do not think this is fully in consensus.”

In morning trading, Chemring Group’s shares rose 5.2% to 231.50p.

 

Quick facts: Chemring Group

Price: 192.8 GBX

LSE:CHG
Market: LSE
Market Cap: £543.44 m
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