Leonardo at a fast pace after Fitch promotion, rating rises to 'BBB'
The decision 'reflects the expectation that the group's ebitda margin and free cash flow will continue to improve over the 2025-2028 period', with a 'further strengthening of leverage parameters'
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(Il Sole 24 Ore Radiocor) - Fitch's upgrade boosted the Leonardo - Finmeccanica stock on the Italian Stock Exchange. The defence group's shares are up almost one and a half points. In the evening of 11 August, the rating agency announced that it had upgraded the company's rating to 'BBB' from the previous 'BBB-'. The outlook is stable.
The decision, Fitch explained, 'reflects the expectation that Leonardo's ebitda margin and free cash flow will continue to improve over the 2025-2028 period', with a 'further strengthening of leverage parameters'. The rating agency believes that "the planned acquisition of Iveco Defence will have a moderate impact on the group's financial profile", slightly worsening debt.
The rating is also supported by 'the group's leadership position in helicopters and other defence and security markets, strong geographic diversification and presence in a wide range of defence and aerospace programmes'. The stable outlook, finally, is due to the belief that Leonardo will "continue to benefit from solid demand in the defence sector, which generates 70% of the group's revenues," and the continued commitment to debt reduction.
