QinetiQ Group: Q1 in line; Improving UK contracting environment expected

Research evidence excerpt

QinetiQ Group: Q1 in line; Improving UK contracting environment expected

Deutsche Bank Group

Deutsche Numis Research

Rating Company Date

Buy QinetiQ Group 16 July 2026

Company Update

Europe

United Kingdom

Reuters Bloomberg Exchange Ticker Price at 15 Jul 2026 (GBP) 450.80

QQ.L QQ/ LN LSE QQ

Price Target 600.00

Aerospace & Defence

Aerospace & Defence ADR ISIN 52-week range 549.50406.00-

QNTQY US74732F1066

Q1 in line; Improving UK contracting

Valuation & Risks environment expected

Richard Paige

QinetiQ's Q1 update confirms that trading is in line with expectations and full-year

Research Analyst

guidance is unchanged. Today’s update supports our view that EBITA will follow the +44-20-7545-4606

usual EBITA H2 weighting of c. 55%, marginally better than last year’s c. 56%.

Management continues to review all options for the US business, with the next Thomas Elgar, CFA

update scheduled alongside H1 results on 12 November.

+44-20-7541-1556

Overall, and acknowledging it is less than two months since the final results, today's

Price/price relative

update is exactly as expected. The long-awaited publication of the UK’s Defence

Investment Plan (DIP) should provide a more certain backdrop for contracting

activity over the next four years, although recent changes in UK leadership mean

some uncertainty lingers. We continue to believe that QinetiQ’s capabilities mean

that it is well-placed to benefit from increased defence spend and the swing 200

towards higher technology platforms and solutions, as this will likely entail faster 2024 2025 2026

product cycles and wider integration testing. The shares trade on an undemanding QinetiQ Group – (Rebased)

Mar FY27E EV/EBITA of 11.2x and PER of 13.3x and offer a FCF yield of 6.8% our

Performance (%) 1m 3m 12m

estimates.