CSG We see c80% upside potential over next c18 months; Q1 26 results and call should restore confidence

Research evidence excerpt

CSG We see c80% upside potential over next c18 months; Q1 26 results and call should restore confidence

J P M O R G A N Europe Equity Research

21 May 2026

CSG Overweight

CSG.AS, CSG NA

We see c80% upside potential over next c18 months; Price (20 May 26):€18.5

Q1 26 results and call should restore confidence ▼Price Target (Dec-27):€34.0 Prior (Dec-27):€40.0

CSG reported Q1 26 results well ahead of our expectations (see below) and

reiterated its guidance for FY26 and the medium term. More importantly, on the European Aerospace & Defense

conference call we felt that the CEO and CFO significantly rebutted many of the David H Perry, CFA AC

arguments made in a recent short-seller report. We make minimal changes to our (44-20) 7742-5606

FY26-30 estimates (Table 2). Reflecting the recent de-rating of the European david.h.perry@jpmorgan.com

J.P. Morgan Securities plc

Defence sector we lower our multiples-based Dec-27 PT to €34.0 from €40.0; this

Lucy Fitzgeraldstill implies potential upside of c80% over the next c18 months. To crystallize this

(44 20) 3493-5251

upside, we believe that CSG needs to do three things: secure new orders to underpin lucy.fitzgerald@jpmorgan.com

its growth targets (CSG expects good orders in the remainder of 2026); J.P. Morgan Securities plc

successfully ramp up production (as it did in Q1 26); and maintain a high level of Jash R Naik

disclosure and transparency (as it did on the Q1 26 conference call). (91 22) 6157-3797

jash.naik@jpmchase.com

• Q1 26 results were better than we expected: Table 1 shows the Q1 26 results J.P. Morgan India Private Limited

vs. our estimates. CSG had not provided Q1 25 financials so it was difficult to

make a forecast. There was no consensus. Many European Defence companies Specialist Sales contact details: