Leonardo thud. EU defence sector under pressure after Rheinmetall data

(Il Sole 24 Ore Radiocor)- Slipping to the bottom of the list Leonardo - Finmeccanica amid a European defence sector under pressure with Rheinmetall's below-expected numbers, while indices are accelerating.

Market sentiment, moderately positive at the start, improved with the Kremlin's confirmation that the meeting between US President Donald Trump and Russian President Vladimir Putin will be held "in the next few days", opening hopes for a possible agreement to end the war in Ukraine, a hypothesis that leads to some pressure on defence stocks after their rally (Leonardo has risen 82% since the start of the year). But weighing on the sector are above all the disappointing numbers of Germany's Rheinmetall (with which Leonardo is in a joint venture for military land vehicles). In the half-yearly report presented to the market, the German group emphasised that the increase in revenues is linked above all to the demand for armaments from the defence sector, which 'remains high' due to the war in Ukraine, the German maxi investment plan, and the greater spending commitment of NATO countries. However, the market focused on the lower-than-expected second quarter numbers, with revenues 4% below consensus. The group confirmed guidance and emphasised that it expects strong incoming orders from Germany in the fourth quarter.