Leonardo runs after jv for sixth-generation fighter

(Il Sole 24 Ore Radiocor) - The market is appreciating the new joint venture between Italy (Leonardo - Finmeccanica ), the UK (Bae Systems) and Japan (Japan Aircraft Industrial Enhancement ) for the creation of an air defence system based on a sixth-generation fighter jet. At Piazza Affari, the share of the group led by Roberto Cingolani gained about two points, among the best stocks of the day, in a FTSE MIB little moved.

The new joint venture will be responsible for the design, development and delivery of the next-generation fighter and will maintain the role of design authority for the Global Combat Air Programme (Gcap) throughout the aircraft's life cycle, even beyond 2070. In the JV - to be established by mid-2025 and based in London - Bae Systems, Leonardo and JAIEC will each hold a 33.3 per cent stake. The Italian group, according to the governance agreements, will appoint the first CEO while the Japanese group will choose the chairman. Saudi Arabia is also expected to participate in the programme as a financial partner.

"The news was expected and will have diluted effects in the medium to long term," comment Equita analysts who confirm a buy recommendation on Leonardo's stock with a target price of €27.5. The brokerage also points out that in an interview in La Repubblica on Sunday, CEO Cingolani stated that the programme will have an estimated overall cost of at least €100 billion and that the entry ofother countries is welcome, referring in particular to Saudi Arabia, which in recent months press sources have already indicated as a potential additional partner.

Meanwhile, the French press over the weekend (La Tribune) reported that Saudi Arabia is reportedly negotiating with the Italian government for the supply of some 20 NH90 military helicopters, Intermonte analysts note, indicating a value of more than EUR 2 billion (10% below the group's annual orders). Intermonte analysts indicate an 'outperform' recommendation with a target price of €27.5. Since the beginning of the year, Leonardo's stock has gained over 75% (+75.36%).