Defence firm Cohort (CHRT) has announced two significant new contract wins in the space of a week. The deals further unerpin the group’s order book while increasing medium-term revenue and earnings visibility.
Riding the wave
At the start of this week, Cohort announced its EM Solutions subsidiary had won an AU$21.7 million (£11.5 million) contract. The deal will see Cohort deliver its Cobra and King Cobra satellite communications terminals to the Portuguse Navy.
EM Solutions was only acquired in January 2025 and is therefore already making a contribution with new orders. Its primary customers are the Australian Navy, Japan and NATO members.
Today, Cohort announced its EID subsidiary had also won a contract with the Portuguese Navy for €42.3 million (£36.6 million). The order is for Integrated Communications Systems and Networks for the country’s new fleet of Supply and Offshore Patrol Vessels.
EID is a Portuguese-based company which designs and manufactures advanced communications systems for the defence and security markets. Last year, the Communications & Intelligence division, which includes EID and EM Solutions, posted revenue of £125 million.
We like Cohort and flagged the stock in our note on ‘under the radar’ defence stocks earlier this year. The firm seems to be on a roll in terms of new contracts, and it’s good to see new acquisition EM hitting its stride.
Having rallied at the start of the conflict in the Middle East, the shares have retraced of late. However, they are still up 36% year-to-date which on one hand is pleasing but on the other is frustrating.
While it’s nice to see our optimism reflected, the rise in the share price means the stock is no longer cheap. Hopefully these new contracts will translate into earnings upgrades down the line to support the valuation.
Read the press release here: https://www.cohortplc.com/investors
