LONDON (ShareCast) - (Sharecast News) - Analysts at Berenberg raised their target price on technology products and services group Chemring from 360.0p to 420.0p on Wednesday, stating the firm's "strong" first-half performance had highlighted underlying momentum.
Berenberg said Chemring's interim 2022 results demonstrated "continued strong operating momentum", with all key metrics meaningfully ahead of consensus.

The German bank stated Chemring's Roke unit continued to perform "very well", and said the planned investment into the business provided "a strong platform" for the momentum to be sustained in the coming years.

"While this higher investment, combined with inflationary pressure and US order delays, is expected to temper profitability in H2, we think the longer-term outlook remains bright," said the analysts.

Berenberg also noted that Chemring's higher-margin Sensors & Information division was also "well positioned" to win order opportunities linked to rising defence budgets, and thinks this will be "a source of upside" to outer-year estimates.

"Against this supportive backdrop, we reiterate our 'buy' rating and increase our price target to 420.0p, reflecting our raised outer-year estimates and higher peer multiples," concluded Berenberg.



Reporting by Iain Gilbert at Sharecast.com

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