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1. Company Snapshot

1.a. Company Description

Leonardo S.p.a., an industrial and technological company, engages in the helicopters, defense electronics and security systems, aeronautics, space, and other businesses in Italy, the United Kingdom, rest of Europe, the United States, and internationally.The company offers a range of helicopters for battlefield, combat, maritime, training, executive and private transport, medical and rescue, security, energy, and utility services, as well as provides support and training services.It also provides trainers, fighters, multi-mission transport, and multi-mission surveillance aircraft; command and controls, radars and sensors, optronics, communication systems, electronic warfare, avionics, air traffic management, and defense systems; and cyber security and resilience, critical communications, digitalization, and monitoring.


In addition, the company offers geoinformation, satellite communications, ground systems, navigation, and satellite operations; interplanetary probes and orbiting modules; and robotics and drilling, electro-optics, laser transmitters, atomic clocks, photovoltaic panels, power distributors and amplifiers, attitude sensors, and orbital micropropulsion.Further, it engages in the production and assembly of major structural composite and metallic components for commercial and military aircraft, helicopters, and unmanned aircraft, as well as provides automation of airport baggage handling, mail sorting centers, and courier logistics hubs.The company was formerly known as Leonardo – Finmeccanica S.p.a. and changed its name to Leonardo S.p.a. in January 2017.


Leonardo S.p.a. was founded in 1948 and is headquartered in Rome, Italy.

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1.b. Last Insights on LDO

Leonardo S.p.A. faces negative drivers, including a slowdown in growth due to the Israel-Hamas cease-fire, which led to a decline in European defense stocks. Despite this, the company's position in the strengthening European defense sector and ongoing rearmament trends are expected to fuel revenue growth. The acquisition of Iveco Group's Defence Business for €1.7 billion will create an Italy-based European land defense champion. However, the company's focus on counter-drone technology and AI-enabled displays may not be enough to offset the impact of geopolitical tensions on its performance.

1.c. Company Highlights

2. Leonardo's Q3 2025 Earnings: Strong Performance Across All Divisions

Leonardo's financial performance in Q3 2025 was impressive, with revenues increasing by 12.4% to €13.4 billion, driven by strong growth across all divisions. EBITDA grew by 22.7% to €945 million, with a return on sales of 7%. The company's net profit was not explicitly stated, but the EPS was reported at 0.2151, below analysts' estimates of 0.3946. Free operating cash flow improved by 22.3%, and net debt decreased by 25.9%. As Roberto Cingolani, CEO of Leonardo, stated, "We're continuing to deliver well on track with good performance across all key metrics."

Publication Date: Nov -11

📋 Highlights
  • Strong Financial Growth:: Q3 2025 new orders surged 24.3% to €18 billion, revenues rose 12.4% to €13.4 billion, and EBITDA increased 22.7% to €945 million with a 7% return on sales.
  • Strategic Collaborations:: Key partnerships advancing include Leonardo Rheinmetall Military Vehicles (500 personnel target), GCAP (next-gen ISANKE/ICS), and Leonardo Baykar Advanced Systems (multi-domain Rome facility for drones).
  • Space & Defense Dominance:: Space division secured €655 million in new orders, launched a Rome satellite fabrication facility, and plans a new satellite constellation. Cyber grew via Zero Trust acquisition.
  • Capital Efficiency:: Free operating cash flow improved 22.3% to €920–980 million in 2025, net debt fell 25.9%, and €20–30 million savings targeted via procurement renegotiations and inflation mitigation.
  • Future Market Positioning:: Launched "Michelangelo Dome" integrated air defense system, partnered with Thales/Airbus to form Bromo (€6.5B revenue target by 2027), and secured €2B Kuwait Air Force order.

Segmental Performance

The company's divisions performed well, with Electronics seeing a solid order intake across all domains, driven by the Eurofighter and GCAP programs. The Helicopters division also saw strong growth, driven by defense and governmental customers and offshore sectors. The Aeronautics division reported new orders of €4.3 billion, up from €1.8 billion in the same period last year, with EBITDA growing to €265 million. The Space division also reported significant growth, with new orders of €655 million and increasing revenues.

Valuation Metrics

To understand what's priced into Leonardo's stock, we can look at various valuation metrics. The company's P/E Ratio is 55.5, indicating a relatively high valuation. The P/S Ratio is 2.76, and the EV/EBITDA is 17.13. The company's ROE is 5.77%, and ROIC is 5.69%. The Net Debt / EBITDA ratio is 1.34, indicating a manageable debt burden. Analysts estimate next year's revenue growth at 8.4%, which may justify some of the premium valuation.

Guidance and Outlook

Leonardo confirmed its full-year guidance, with a strong expectation for the rest of the year, driven by the continued momentum in its main businesses on the defense and security side. The company is confident in its ability to deliver on its targets, driven by the quality of its order intake and the strength of its operating performance. Roberto Cingolani proposed upgrading the guidance by 2% to 3% if the company beats its targets by a certain amount.

Strategic Initiatives

Leonardo is working on several strategic initiatives, including the formation of a giant space company with Thales and Airbus, called Bromo, which will be operational in 2027. The company is also progressing with the integration of DRS and is studying different options for Hensoldt, including divestiture or merger with other activities. The company's capacity boost program is aimed at improving efficiency in production, manufacturing, and supply chain.

3. NewsRoom

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Axon Vision Announce Strategic Cooperation Agreement with Leonardo DRS to Deliver AI-Enhanced Counter-UAS Solutions for U.S. Market

Dec -03

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European Defense Stocks Fall After U.S. Hails Ukraine Progress

Nov -24

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European Defense Stocks Fall After U.S. Hails Ukraine Progress

Nov -24

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Royal Thai Army Battle Management Deal Might Change The Case For Investing In Leonardo DRS (DRS)

Nov -18

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Leonardo DRS and Chaiseri Defense Strengthen Partnership with New Battle Management System Contract to Support Royal Thai Army

Nov -13

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Thousands of Leonardo staff walk out in dispute over pay

Nov -12

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Has Leonardo’s 118% Rally in 2024 Left the Stock Fully Priced?

Nov -05

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Leonardo (BIT:LDO) Valuation: Is the Recent 9% Pullback an Opportunity for Investors?

Nov -05

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.61%)

6. Segments

Electronics for Defense and Security

Expected Growth: 5%

Leonardo S.p.a.'s Electronics for Defense and Security segment growth is driven by increasing global security threats, rising demand for advanced defense systems, and growing investments in cybersecurity. Additionally, the company's focus on innovation, R&D, and strategic partnerships contribute to its 5% growth rate.

Helicopters

Expected Growth: 4%

Leonardo S.p.a.'s helicopter segment growth is driven by increasing demand for search and rescue, medical evacuation, and offshore transport services. Government investments in defense and homeland security, coupled with the need for modernization and replacement of aging fleets, also contribute to growth. Additionally, the company's focus on innovation, digitalization, and sustainability enhances its competitive position.

Aircraft

Expected Growth: 5%

Leonardo S.p.a.'s 5% growth in aircraft sales is driven by increasing demand for military and commercial helicopters, expansion in emerging markets, and investments in innovative technologies such as unmanned aerial vehicles (UAVs) and electric propulsion systems.

Aerostructures

Expected Growth: 4%

Leonardo S.p.a.'s Aerostructures segment growth is driven by increasing demand for lightweight, fuel-efficient aircraft components, strategic partnerships with major OEMs, and investments in digital manufacturing and automation. Additionally, the company's focus on innovation, cost reduction, and supply chain optimization contributes to its growth.

Others

Expected Growth: 3%

Leonardo S.p.a.'s Others segment growth is driven by increasing demand for cybersecurity solutions, expansion in the space sector, and growing investments in digital technologies. Additionally, the company's focus on innovation and R&D, strategic partnerships, and geographic expansion also contribute to its growth.

7. Detailed Products

Aircraft

Leonardo S.p.a. designs, manufactures and delivers a wide range of military and civil aircraft, including trainers, transport aircraft, and helicopters.

Helicopters

Leonardo S.p.a. produces a range of helicopters for military, civil, and commercial use, including the AW139, AW189, and AW609.

Electronics

Leonardo S.p.a. develops and manufactures a range of electronic systems, including radar, communication systems, and electronic warfare systems.

Aerostructures

Leonardo S.p.a. designs and manufactures aerostructures, including wings, fuselages, and other aircraft components.

Cyber Security

Leonardo S.p.a. provides cyber security solutions and services to protect against cyber threats and attacks.

Space

Leonardo S.p.a. develops and manufactures satellite systems, including Earth observation, telecommunications, and navigation satellites.

8. Leonardo S.p.a.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Leonardo S.p.a. is medium due to the presence of alternative defense and aerospace companies.

Bargaining Power Of Customers

The bargaining power of customers for Leonardo S.p.a. is low due to the company's strong brand reputation and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Leonardo S.p.a. is medium due to the presence of multiple suppliers and the company's moderate bargaining power.

Threat Of New Entrants

The threat of new entrants for Leonardo S.p.a. is low due to the high barriers to entry in the defense and aerospace industry.

Intensity Of Rivalry

The intensity of rivalry for Leonardo S.p.a. is high due to the presence of several established competitors in the defense and aerospace industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 36.06%
Debt Cost 7.95%
Equity Weight 63.94%
Equity Cost 9.86%
WACC 9.17%
Leverage 56.38%

11. Quality Control: Leonardo S.p.a. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Kongsberg Gruppen

A-Score: 5.9/10

Value: 1.4

Growth: 8.9

Quality: 8.0

Yield: 5.0

Momentum: 9.5

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
Dassault Aviation

A-Score: 5.7/10

Value: 2.3

Growth: 6.0

Quality: 6.5

Yield: 5.0

Momentum: 9.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Accelleron

A-Score: 5.3/10

Value: 0.9

Growth: 4.7

Quality: 6.8

Yield: 3.1

Momentum: 9.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Leonardo

A-Score: 4.4/10

Value: 1.7

Growth: 6.8

Quality: 4.0

Yield: 1.2

Momentum: 10.0

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
QinetiQ

A-Score: 4.2/10

Value: 5.0

Growth: 4.4

Quality: 2.4

Yield: 2.5

Momentum: 7.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Elbit Systems

A-Score: 4.0/10

Value: 1.1

Growth: 6.2

Quality: 5.1

Yield: 1.9

Momentum: 5.0

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

47.2$

Current Price

47.2$

Potential

-0.00%

Expected Cash-Flows