CSG Very strong start to the year; shares are significantly undervalued and could rise a lot from here

Research evidence excerpt

CSG Very strong start to the year; shares are significantly undervalued and could rise a lot from here

J P M O R G A N Europe Equity Research

20 May 2026

CSG Overweight

CSG.AS, CSG NA

Very strong start to the year; shares are significantly Price (19 May 26):€17.2

undervalued and could rise a lot from here Price Target (Dec-27):€40.0

Our Take: CSG has reported Q1 26 Adj EBIT meaningfully ahead of JPMe, with European Aerospace & Defense

ACthe caveat that there was no prior year comp and we were flying slightly blind when David H Perry, CFA

we made our forecast. The company has reiterated its FY26 guidance and its med- (44-20) 7742-5606

term guidance. The press release provides a lot of disclosure on the steps CSG is david.h.perry@jpmorgan.com

taking to successfully ramp up its own-production of medium and large calibre J.P. Morgan Securities plc

Ammo (M/L Ammo), directly addressing the major bear case in a recent short- Lucy Fitzgerald

seller report. With the shares down 47% since the high of March 9th we believe they (44 20) 3493-5251

lucy.fitzgerald@jpmorgan.com

offer exceptional upside and strongly reiterate our OW rating. J.P. Morgan Securities plc

• Noteworthy Areas: Table 1 shows the Q1 26 results vs. our estimates. CSG Jash R Naik

had not provided Q1 25 financials so it was difficult to make a forecast. There (91 22) 6157-3797

jash.naik@jpmchase.com

is no valid consensus. We know that European Defence companies have very J.P. Morgan India Private Limited

seasonal earnings and that Q1 is almost always the smallest quarter of the year

for sales and Adj. EBIT. For example, RHM and LDO recently reported Q1 26 Specialist Sales contact details:

operating profit that was 14% and 13% of our FY26 estimates respecively. In Sam Edmunds - Specialist Sales -