CSG’s €42 Billion Backlog Can’t Stop the Bleeding — Analysts See a 76% Rebound

Europe's largest defense IPO trades near 52-week low as analysts see 76% upside, with Q1 results due May 20.

The paradox at CSG N.V. is hard to ignore. The Prague-based defence contractor boasts a record order book worth €42 billion — equivalent to more than five years of revenue — yet its shares are trading within a hair’s breadth of a 52-week low. At €18.74, the stock has shed over 44% of its value since its January 2026 initial public offering, leaving IPO investors nursing losses of roughly 25%.

The disconnect between operational strength and market performance has become the defining narrative for Europe’s largest defence IPO. Revenue surged nearly 72% last year to €6.7 billion, and management is guiding for 2026 sales between €7.4 billion and €7.6 billion, with an operating margin of 24% to 25%. Fresh contracts continue to roll in: a €300 million artillery ammunition deal in Europe, and a $2.5 billion air defence systems agreement in Southeast Asia via subsidiary Excalibur International.

Yet the stock keeps sliding. On Thursday, it touched €18.42 — a new low for the year — before recovering slightly. The broader European defence sector has been under pressure since Kyiv’s chief negotiator signalled a potential resolution to the conflict, sending Rheinmetall and Hensoldt down nearly 6% in a single session, while Saab lost 2.2% and BAE Systems fell 3.3%. But CSG has been hit disproportionately hard. While Rheinmetall and Renk have dropped roughly 10% year-to-date and Saab around 12%, CSG’s decline approaches one-third. A post-earnings plunge of over 10% — despite results beating forecasts — underscored the market’s skittishness.

Analysts argue the sell-off has gone too far. Of the ten covering the stock, nine rate it a buy and none recommend selling. The average price target of €35.40 implies upside of more than 76%. Jefferies, Kepler Capital and Berenberg all reaffirmed their buy ratings in April, while Deutsche Bank initiated coverage with a €35 target, pointing to the multi-year European munitions cycle as a structural tailwind. JPMorgan is even more bullish, setting a target of €40 on an “Overweight” rating, citing projected revenue growth and high margins, and predicting the company’s leverage ratio will stay well below its own targets.

Morningstar analyst Loredana Muharremi dismissed the sector-wide reaction to peace talks as overblown, arguing that European defence valuations are anchored in structural budget increases, not short-term Ukraine-related revenues. Even a ceasefire, she said, would be unlikely to reverse rearmament plans.

The next major test comes on 20 May, when CSG reports its first quarterly results as a publicly listed company. That release will offer the first detailed look at its cost structure and, crucially, whether it can defend the high margins it has promised amid sector headwinds. For now, the bulls are betting the order book — and the analysts — will eventually win out.