Broker snap: Credit Suisse cuts Chemring's target, but stays at outperform

21st Nov 2011 12:33

Military equipment maker Chemring is still in the good graces of analysts at Credit Suisse, although less so than before its most recent trading statement, last Friday. Credit Suisse has decided to cut its 2011 and 2012 estimates for earnings per share from Chemring due to the 7% sales miss announced on that occasion (4% due to deferred revenue) and its uncertain outlook statement. In turn, that has motivated a reduction in the broker´s target on the firm´s share price to 460p, from 630p.These analysts however have decided to maintain an outperform rating on the firms shares, "based on current valuation and underlying structural qualities of the business."As regards the latter Credit Suisse highlights that, "Despite the cautious outlook on US and European defence budgets, on our new forecasts Chemring still offers 12% organic growth in 2012. This is due to best non-NATO positioning in the sector (30% of sales) and exposure to key defence growth areas in cyber electronics/IED."AB