The Czechoslovak Group is deepening its bet on the American defense market with a new Washington, D.C. headquarters and a former Northrop Grumman executive at the helm, yet the company’s shares continue to trade dangerously close to their 52-week low. The stock ended Tuesday at €13.82, just a whisker above the trough of €13.62, as a brutal 62% collapse from January’s record high around €36 shows no signs of abating.
David Jacobs, a 15-year veteran of Northrop Grumman and Raytheon who has orchestrated transactions worth over $200 billion, will lead the new US office and report directly to majority owner Michal Strnad. His mandate extends far beyond representation: he is tasked with shaping long-term strategy and steering acquisitions across North America. The immediate anchor for that ambition is a $635 million contract to build a munitions factory for the US Army in Iowa, with a groundbreaking scheduled for this summer.
The operational picture, meanwhile, remains robust. CSG posted first-quarter revenue of €1.54 billion and boasted a record order backlog of €17 billion at the end of March, driven largely by its land systems division and a recovering US munitions business. Management has confirmed its full-year guidance of average revenue of €7.5 billion and an operating margin around 24%. Production capacity is also ramping up, with a target of roughly 850,000 artillery and tank shells by year-end.
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But none of that has resonated with equity investors. The stock shed 26% in the past month alone, sinking well below the €25 IPO price. The relative strength index, at 32.7, points to deeply oversold conditions, while the 50-day moving average at €17.23 stands as a critical resistance level that must be reclaimed to break the technical downtrend.
At the Eurosatory defense exhibition, CSG unveiled the Trident multi-layered air defense system, developed with Turkish partner Roketsan. The system combines missiles, cannons, and electronic warfare to shield military formations and strategic assets from drones and aerial threats. Yet the product launch failed to slow the selling pressure.
The juxtaposition is stark: a bulging order book and a strategically expanding US footprint on one hand, and a stock that investors are unwilling to touch on the other. The new Washington office and the Iowa plant are tangible steps toward building a permanent North American division, but the market is demanding more than a blueprint. CSG must quickly convert its record backlog into hard US-dollar profits before the shares find a lasting floor.
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