The defence continues to run. Leonardo stands out
The headlines benefit from statements by France and the UK, which have assured the availability of military forces in Ukraine after the eventual peace agreement with Russia.
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(Il Sole 24 Ore Radiocor)- There is no stopping the run-up in defence stocks, which continue to benefit from geopolitical tensions and after declarations by France and the UK that they would make military forces available in Ukraine after the eventual peace agreement with Russia. Leonardo - Finmeccanica was the second best performer on the list; also well bought was Fincantieri. In Paris, purchases focus on Thales, Airbus Group, Safran and Dassault Aviation. In London Bae Systems rose, in Frankfurt Rheinmetall and Hensoldt . Also doing well in Milan was Avio with Jefferies astarting coverage with a buy. Defence stocks were the stars of 2025: among the blue chips, the pink jersey of the year went to Fincantieri (+141%), with Leonardo up almost 90%. And the mood in the sector does not look likely to change any time soon: the British Prime Minister Keir Starmer said in the press conference following the meeting of the Coalition of the Willing in Paris that 'after the ceasefire, Britain and France will set up military hubs in Ukraine to support the defence needs of Ukrainians'. Paris, London and Kiev signed a declaration of intent "concerning the deployment of forces in Ukraine when there is a peace agreement".
As for Avio, Jefferies initiated coverage with a buy rating and a target price of EUR 39.50. According to analysts, Avio 'represents a unique opportunity in solid rocket propulsion and will benefit from diversification into the US missile propulsion market, which is about ten times larger than the current European defence market in this segment, enabling expansion of the higher-margin business'. According to Jefferies, the group's targets of a high double-digit compound annual ebitda growth rate until 2035 'is well supported by significant opportunities driven by growth in both defence and space markets'. Despite some earnings compression expected through 2028, the analysts say, "we believe there is upside potential in light of strong new order intake prospects".
