Defence sector on the shields, spotlight on Leonardo and Fincantieri in Milan

(Il Sole 24 Ore Radiocor) -The war in the Middle East gives wings to defence stocks, which had been performing poorly in the last period. In Milan, shares in Leonardo - Finmeccanica and Fincantieri rose. In the rest of Europe, the German Rheinmetall , the British Bae System, the French Thales and the Swedish Saab Ab . Rolls Royce and Safran, on the other hand, are weak. "It's a matter of flows on the sectorrather than reflecting on the true impact of the conflict on the improvement of individual groups' accounts," commented one analyst, speculating that stocks in the sector, as well as in the energy sector, are the subject of thematic basket buys triggered more by an emotional reaction to the news from the Middle East.

In any case, the spotlight has been on Leonardo-Finmeccanica for days, as last Friday the UK's BBC reported that Britain's Ministry of Defence has awarded a €1.15 billion orderto supply 23 AW149 helicopters. Analysts at Intermonte commented that according to their estimates the order represents around five per cent of the total annual orders. The experts also mentioned ongoing negotiations for a partnership with the Edge Group, one of the world's leading advanced technology groups created to develop agile, innovative and disruptive defence solutions. According to rumours, a financial and industrial partner could enter the aerostructures, whilethe dossier is also being studied by Saudi Arabia. Experts, therefore, recommend an 'Outperform' on Leonardo's stock with a price target of 63 euros. Analysts at Banca Akros are more cautious, although they appreciate the fact that the group will supply helicopters to Great Britain. However, they continue to recommend a 'Neutral' with a price target of €17. 'Leonardo is well positioned to receive the support of the British government in the export deal for the AW149, being the only manufacturer of military helicopters in Britain,' they concluded in any case.