Leonardo down, no surprises from the numbers but the wait is on for the new plan

(Il Sole 24 Ore Radiocor) - Numbers above guidance and in line with consensus for Leonardo, but the market's wait is all for 12 March, when the new plan will be presented, with long-term targets and growth trajectories. The stock trades down less than one and a half points. Meanwhile, analysts reason about the group's prospects in light of the quarter's numbers.

Analysts at Ubs (who have a neutral rating on the stock with tp at EUR 60) say that the accounts are broadly in line, but point to weakness in the defence electronics division (DE&S). Citing the group's positive results, Ubs points out that 'DE&S is the negative note that offsets the rest, with ebitda of EUR 408 mln, 17% below consensus'. For Gabriel Debach, market analyst at eToro, on the sector mix, a fact emerges that "at first glance may seem counterintuitive and is instead the healthiest signal in the balance sheet: Electronics for Defence and Security (DE&S) remains the driving force, but is no longer the only pillar.

Revenues are growing 'less' than the other main businesses (+7.6%), and precisely because of this, its share of ebitda drops (within the scope of the operating divisions, from 55.2% to 52.1%), while Cyber and Space accelerate with much steeper expansions in profitability. It is a mix shift towards a more balanced Leonardo,' according to the analyst. For Debach, the exceedance of guidance is 'significant' and 'reinforces the credibility of the growth path'.

Weighing on today's share price decline, according to the analyst, are the expectations for 12 March: 'The market cannot yet answer the question that really matters: will management raise plan targets on 12 March, will it explicitly incorporate ReArm Europe into the numbers, and will it give a definitive solution to Aerostructures (which for Debach are the critical data point, ed.)? Until that answer arrives,the stock has no new catalyst to price'. For Barclays (equal weight, tp at EUR 53), the preliminary figures are 'decent, meeting expectations in terms of orders booked, momentum in the aviation sector and liquidity'. Pending the business plan, analysts say that the agreement with Iveco Defence, together with the sale of Aerostructures, 'could lead toan increase in earnings over the course of the year and justify an upward rating revision'.

Intermonte points out that orders and revenues 2025 beat consensus expectations, while ebitda and fcf were in line. The numbers were 1% higher than the company's guidance on orders, 5% higher on revenues and ebitda, and 6% higher on fcf. Analysts reiterate their positive view on the stock (outperform with a target price of €63). Both Intermonte and Equita point out that Leonardo Drs (which accounts for 19% of Leonardo's market cap) has rallied 15% on the Nasdaq, following above-consensus fourth-quarter numbers with 3% higher-than-consensus revenue guidance and slightly lower-than-consensus eps guidance.