Issuance activity: On Wednesday, 21 October, MinFin is scheduled to auction CZK4.0bn of 2031 bonds, CZK2.0bn of 2034 bonds and CZK1.0bn of 2043 floater. Last week, the MinFin announced that it had issued an additional CZK17.5bn of 3M retail T-bills. This year's total retail issuance has therefore reached CZK91.5bn. The retail campaign is likely to continue to reduce the overall CZGB supply on financial markets next year too, as another subscription period is already planned for the end of the year, with the securities being issued in 1Q27. So far this year, MinFin has issued a total of CZK292.6bn CZGBs on the primary market (MinFin projects CZK270 370bn for the full year), as well as an additional CZK121.8bn on the secondary market.

Issuance activity: On Wednesday, 21 October, MinFin is scheduled to auction CZK4.0bn of 2031 bonds, CZK2.0bn of 2034 bonds and CZK1.0bn of 2043 floater. Last week, the MinFin announced that it had issued an additional CZK17.5bn of 3M retail T-bills. This year's total retail issuance has therefore reached CZK91.5bn. The retail campaign is likely to continue to reduce the overall CZGB supply on financial markets next year too, as another subscription period is already planned for the end of the year, with the securities being issued in 1Q27. So far this year, MinFin has issued a total of CZK292.6bn CZGBs on the primary market (MinFin projects CZK270 370bn for the full year), as well as an additional CZK121.8bn on the secondary market.

Market situation: CZGB yields are hovering just below recent local peaks, with a slight cheapening in ASW terms. With a light data calendar this week, it is likely that the Czech rates markets will continue to be driven primarily by core markets. However, with less than two weeks until the CNB's media blackout period begins on 29 October, we may start to hear comments from board members.

Rates outlook: Given the rise in core inflation and its momentum in September, we now expect the CNB to raise key repo rate by 25bp to 4% at its upcoming November meeting. Although further rate hikes beyond the November meeting cannot be ruled out, we still consider the market’s expectation of a repo rate rising to near 5% over the next year to be excessive, as confirmed recently also by comments from the CNB. Longer CZK IRS and CZGB yields are likely to continue to mimic the core markets, with neither 10-year Bund yields nor 10-year EUR IRS having peaked yet, according to the external assumptions of our forecast.

Based on an update to our model, we are issuing a new 'Buy' recommendation for Colt CZ Group SE shares, with a target price of CZK1,259 per share. Our previous Buy recommendation, with a target price of CZK893, was issued on 14 July 2025. A comparison of our new TP with the current market price suggests a premium of +48.6%.

Based on an update to our model, we are issuing a new 'Buy' recommendation for Colt CZ Group SE shares, with a target price of CZK1,259 per share. Our previous Buy recommendation, with a target price of CZK893, was issued on 14 July 2025. A comparison of our new TP with the current market price suggests a premium of +48.6%.

Since the beginning of this year, Colt has added a further pillar to its traditional business of firearms and ammunition. This new area of business involves energy materials, which are a key raw material in the production of gunpowder. This has strengthened the Colt Group’s vertical structure further. Although this sector only accounts for around 20% of total revenue, it contributes around 35% to total EBITDA thanks to its high margin. Compared with other sectors, a margin of 55% would significantly improve the group’s profitability. The majority of sales are to customers in Europe. Unsurprisingly, Europe is thus becoming Colt’s main market. Ammunition and energy materials are mainly sold to customers on this continent, while the US is crucial for arms sales. Consequently, financial performance is expected to improve substantially by 2026. Organic growth will be complemented by growth through acquisitions. Production will be expanded from the start of 2027, providing a further positive boost to financial performance.

Colt has been, is and is likely to remain active in the field of M&A. We have analysed strategic acquisitions: Colt by Česká zbrojovka (the group was subsequently renamed Colt CZ), Sellier & Bellot, and, in January this year, Synthesia Nitrocellulose in previous reports. Colt’s ambition is to achieve total revenue of EUR2bn by 2030, equivalent to almost CZK50bn. We estimate total revenue at CZK33bn this year. While we expect organic growth, further acquisitions will most likely be necessary in addition to this to achieve the target. Furthermore, we emphasise that our estimates include only existing operations.

Colt pays a decent dividend. This year, Colt paid its shareholders CZK30 per share from its 2025 profits. This equates to a payout ratio of 93% of adjusted net profit. Given Colt’s ability to generate cash, we project that the payout ratio will remain at around 90%. Therefore, we estimate next year's dividend to be CZK48.8 per share, implying a gross yield of 5.8%.

We valued Colt using the DCF model. We have set a new TP of CZK1,259 per share. Based on this valuation, Colt is currently trading at a P/E ratio of 23.2x (2026) and 17.8x (2027), as well as an EV/EBITDA ratio of 12.3x (2026) and 9.7x (2027). It is mixed compared to its peers.