London, UK, 13 December 2017

Edison issues outlook on Cohort (CHRT)

Cohort continues to make progress in a tough UK defence trading environment. Our earnings forecasts remain largely unchanged as performances at MASS and EID continue ahead of expectations, compensating for pressures at MCL and SEA. Our fair value calculation currently stands at 483p implying significant unrecognised potential. The recent share price fall seems unwarranted given the maintained outlook.

Cohort continues to execute well in the face of clear pressures within the UK defence sector in recent months. As such, it deserves a premium rather than the current 20% FY19e discount to the UK defence sector, comprising less resilient and profitable peers that face company-specific ratings issues. The reduction in minorities is enhancing and at our peer-based SOP value of 460p the stock would trade on 14.7x our FY19e EPS, a c 10% premium to UK defence peers. Our DCF value continues to rise, currently standing at 506p. Our fair value rises 3% to 483p (from 471p), calculated as the average of the SOP and DCF.

Click here to view the full report.

All reports published by Edison are available to download free of charge from its website
www.edisoninvestmentresearch.com

About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information please contact Edison:

Andy Chambers, +44 (0)20 3681 2525
Annabel Hewson, +44 (0)20 3077 5700
industrials@edisongroup.com

Learn more at www.edisongroup.com and connect with Edison on:
LinkedIn https://www.linkedin.com/company/edison-investment-research
Twitter www.twitter.com/Edison_Inv_Res
YouTube www.youtube.com/edisonitv