CSG Stock Rallies 14% in a Week on Q1 Beat, But Analysts See Further 75% Upside

Defence contractor Czechoslovak Group surges after blockbuster Q1 results: revenue up 13.8%, net profit jumps 83%, and order backlog hits €17bn. Shares trade at wide discount despite weekly rally.

The battered shares of Czechoslovak Group have staged a sharp recovery after the defence contractor reported a blockbuster first quarter, but the stock still trades at a wide discount to both its IPO price and the consensus analyst target.

Closing at €18.70 on Friday — down 3.4% on the session but up roughly 14% for the week — CSG has now gained about 19% from the all-time low of €15.73 plumbed earlier this month. That nadir came after a short-seller attack from Hunterbrook Media in early May, which questioned whether the company was merely refurbishing old ammunition and raised transparency concerns around its January Euronext listing. CSG formally rejected both allegations in two separate statements, calling the report a selective reading of public information.

The trigger for the turnaround was the quarterly earnings release on 20 May. Revenue for the first quarter of 2026 reached €1.544bn, a 13.8% year-on-year increase. Operating EBIT climbed 8.7% to €372m, producing a margin of 24.1%. Net profit surged 83% to €299m. The order backlog expanded by 15% from the end of 2025 to €17bn, with an additional €27bn sitting in the negotiation pipeline.

Geographically, 49% of first-quarter sales came from Europe excluding Ukraine, 21% from Ukraine and 16% from the US. NATO countries accounted for 64% of total revenue — a metric that resonates amid Europe’s ongoing defence spending debate.

Growth was heavily concentrated in the Defence Systems segment, where revenue jumped 26.5% to €1.251bn. Land Systems led the charge with an 82.8% increase to €173m, while medium- and large-calibre ammunition rose 22% to €1.049bn.

The Ammo+ segment, by contrast, was a drag. Revenue there fell 20.5% to €291m, and its EBIT margin came in at just 4.3%, reflecting continued weakness in the US civilian market. CSG is investing heavily in new capacity — including production lines in Slovakia that will add 70,000 rounds per year and lift total capacity by 20% by the end of 2026 — but that spending is weighing on short-term margins. Management expects a improvement from the second quarter onward.

The company reaffirmed its full-year guidance: revenue between €7.4bn and €7.6bn, with an operating EBIT margin of 24% to 25%. Half-year results are due on 7 August.

Credit agencies have provided additional support. Moody’s upgraded CSG’s bonds to Baa3, and Fitch affirmed its BBB- rating with a stable outlook. The upgrades should lower future financing costs and open the stock to institutional investors with minimum rating requirements.

CSG also collected the full €275m receivable from the sale of its Mobility, Perazzi and Healthcare divisions in the first quarter, sharpening its focus on defence and aviation. Net debt stood at 1.3 times operating EBITDA, already below the company’s own target of 1.5 times.

Despite the weekly rally, the shares remain far from previous highs. The 50-day moving average of €21.90 is roughly 15% above the current price, and the 52-week peak of €33.81 — touched in January — is almost 45% higher. The stock also trades at a forward P/E of 16, a steep discount to the European aerospace and defence sector average of 23.

Analyst enthusiasm, however, is undimmed. Ten analysts rate the stock a buy, none recommend selling. The average price target is €32.85, implying upside of about 76%, and JPMorgan sees the stock reaching €40. The next key support zone lies between €18.56 and €17.56. If that holds, the momentum from the Q1 breakout could continue; if it breaks, the weekly low of €15.24 — just above the all-time trough — comes back into play.