CSG’s €250 Million Shell Deal and Azerbaijan Bet Fail to Halt Stock’s Descent

Czech defense group CSG posts record revenues and a €250M artillery deal, yet shares hit new lows amid European defense sell-off and investor rotation fears.

The Czech defense group CSG is living a tale of two realities. On one side, the company is chalking up record revenues, signing multi-year joint ventures, and locking in orders worth hundreds of millions of euros. On the other, its share price has been in freefall since January, hitting new lows even as the order book swells to eye-watering proportions.

The latest operational milestone is a joint venture in Azerbaijan called VEXA DS. Through its subsidiary Excalibur Army, CSG will provide technology and expertise to build a regional maintenance hub for armored vehicles alongside a local partner. The project is structured to run for more than a decade and carries a volume in the triple-digit millions. It adds to a string of recent wins, including a contract worth nearly €250 million to supply standard NATO artillery ammunition to a European customer, with delivery scheduled within ten months.

Yet none of this has moved the needle for investors. The stock touched a new 2026 low of €18.79 on Wednesday, extending a slide that has now erased roughly 44 percent from its January peak. The broader sell-off in European defense names has played a role, with analysts pointing to investor rotation and fears that rising sovereign debt levels could crimp future defense budgets. CSG has been among the hardest hit, losing about 27 percent in the past month alone.

The market’s pessimism stands in stark contrast to the view from the analyst community. Nine out of ten analysts covering the stock rate it a buy, with price targets that imply massive upside. The average target sits at €35.40, the highest at €42.00, and even the most bearish estimate comes in at €31.47. J.P. Morgan, which rates the stock “Overweight” with a €40 target, notes that CSG is already the second-largest European player in the artillery ammunition segment. Deutsche Bank also recommends buying, arguing that the company is perfectly positioned to benefit from a multi-year European cycle of munitions replenishment.

The numbers back up the optimism. For the current financial year, management is targeting revenue of up to €7.6 billion, up from €6.7 billion last year, when sales surged nearly 72 percent. The adjusted EBIT margin is expected to land between 24 and 25 percent, with the board aiming for as high as 28 percent by the end of the decade through scale effects and vertical integration. The order backlog is in the double-digit billions, providing long-term revenue visibility.

CSG is also pushing into new geographies. The company is in the process of acquiring a 49 percent stake in Hirtenberger Defence Systems (HDS) from Hungary’s 4iG Group. The deal, which would mark CSG’s first acquisition in Austria, adds mortar systems and related ammunition to the portfolio. Completion depends on regulatory approvals, and a green light from authorities is seen as a potential near-term catalyst for the stock.

The next major test comes on May 20, 2026, when CSG publishes its first quarterly report as a listed company. That release will offer the first detailed look at how quickly the recent large orders are flowing through the books. For investors, it is the moment when the operational reality must begin closing the gap with the market’s perception — or risk widening it further.