Berenberg nudges up target price on Chemring

Analysts at Berenberg slightly raised their target price on aerospace and defence firm Chemring from 300.0p to 320.0p on Wednesday, stating cash was "king".

Berenberg said Chemring's post-close trading update was yet another positive touch-point with the market, as cash performance continued to track ahead of expectations and full-year guidance was confirmed at the upper end of current consensus, while the group's order book provided "excellent visibility" for 2021 and beyond.

"Yet again, all this highlights the ongoing resilience and improving quality of the underlying business," said the analysts.

The German bank, which also reiterated its 'buy' rating on the stock, stated that it remained "positively disposed" towards Chemring on the back of higher cash and lower net debt forecasts.

"Indeed, we continue to see upside potential to medium-term estimates given enduring momentum, with the group's low gearing (we forecast 2020 net debt/EBITDA of 0.7x) offering capital deployment optionality, in our view."