Leonardo SpA (FINMY) AI Stock Analysis

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Leonardo SpA

(OTC:FINMY)

78Outperform

Leonardo SpA's overall stock score of 78.1 reflects its strong financial performance and positive earnings outlook, bolstered by record-breaking orders and revenue growth. The technical indicators suggest a strong upward momentum, although caution is advised due to overbought signals. The valuation appears high, potentially making the stock overvalued unless future growth justifies it. Challenges in specific business sectors remain, but the overall outlook is promising.

Leonardo SpA (FINMY) vs. S&P 500 (SPY)

Market Cap

$24.74B

Dividend Yield0.46%

Average Volume (3M)11.98K

Price to Earnings (P/E)21.1

Beta (1Y)0.60

Revenue Growth16.23%

EPS Growth63.13%

CountryUS

Employees59,083

SectorIndustrials

Sector Strength64

IndustryAerospace & Defense

Share Statistics

EPS (TTM)1.01

Shares Outstanding1,156,300,800

10 Day Avg. Volume28,265

30 Day Avg. Volume11,976

Financial Highlights & Ratios

PEG Ratio0.33

Price to Book (P/B)N/A

Price to Sales (P/S)0.43

Price to Cash Flow (P/CF)5.50

P/FCF Ratio6.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Leonardo SpA Business Overview & Revenue Model

Company DescriptionLeonardo S.p.a., an industrial and technological company, engages in the helicopters, defense electronics and security systems, aeronautics, space, and other businesses in Italy, the United Kingdom, rest of Europe, the United States, and internationally. The company offers a range of helicopters for battlefield, combat, maritime, training, executive and private transport, medical and rescue, security, energy, and utility services, as well as provides support and training services. It also provides trainers, fighters, multi-mission transport, and multi-mission surveillance aircraft; command and controls, radars and sensors, optronics, communication systems, electronic warfare, avionics, air traffic management, and defense systems; and cyber security and resilience, critical communications, digitalization, and monitoring. In addition, the company offers geoinformation, satellite communications, ground systems, navigation, and satellite operations; interplanetary probes and orbiting modules; and robotics and drilling, electro-optics, laser transmitters, atomic clocks, photovoltaic panels, power distributors and amplifiers, attitude sensors, and orbital micropropulsion. Further, it engages in the production and assembly of major structural composite and metallic components for commercial and military aircraft, helicopters, and unmanned aircraft, as well as provides automation of airport baggage handling, mail sorting centers, and courier logistics hubs. The company was formerly known as Leonardo Finmeccanica S.p.a. and changed its name to Leonardo S.p.a. in January 2017. Leonardo S.p.a. was founded in 1948 and is headquartered in Rome, Italy.

How the Company Makes MoneyLeonardo SpA generates revenue through the sale of its high-tech products and services across its core sectors of aerospace, defense, and security. The company's key revenue streams include the manufacturing and sale of military and civil aircraft, helicopters, and defense electronics systems. Additionally, Leonardo provides maintenance, repair, and overhaul (MRO) services, as well as cybersecurity and space solutions. Significant partnerships with governments and defense agencies, along with long-term contracts and collaborations with other aerospace and defense companies, contribute to its earnings. The company leverages its technological expertise and global presence to secure contracts and expand its market reach.

Leonardo SpA Financial Statement Overview

Summary

Leonardo SpA exhibits robust financial performance with strong revenue and profit growth, improved profitability margins, and efficient cash flow management. Despite a high debt load, the company has improved its leverage ratios and return on equity. Continued focus on managing debt levels and sustaining cash flow growth will be crucial for maintaining financial stability.

Income Statement

Very Positive

Leonardo SpA has demonstrated strong revenue growth with a 16.15% increase from 2023 to 2024. The gross profit margin improved to 11.35% in 2024, up from 10.79% in 2023. The net profit margin has also increased significantly to 6.05% in 2024 from 4.30% in 2023, indicating enhanced profitability. However, EBIT margin data for 2024 is unavailable for further analysis.

Balance Sheet

Positive

The company maintains a sound equity base with an equity ratio of 26.71% in 2024, up from 25.42% in 2023, reflecting stable financial health. The debt-to-equity ratio improved to 0.52 in 2024 from 0.63 in 2023, suggesting reduced leverage. Return on equity increased to 11.95% in 2024 from 8.44% in 2023, indicating better returns to shareholders. However, the overall debt levels remain significant, which could pose risks.

Cash Flow

Very Positive

Leonardo SpA's free cash flow grew by 59.90% year-over-year, signaling strong cash generation capabilities. Operating cash flow to net income ratio is 1.43, indicating efficient conversion of income to cash. Additionally, the free cash flow to net income ratio increased, reflecting improved cash profitability. Nevertheless, fluctuations in capital expenditures could impact future cash flows.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
17.76B	15.29B	14.71B	14.13B	13.41B
	Gross Profit
2.02B	1.65B	1.22B	1.05B	1.03B
	EBIT
0.00	1.00B	859.00M	827.00M	645.00M
	EBITDA
2.25B	1.54B	1.65B	1.38B	1.22B
	Net Income Common Stockholders
1.07B	658.00M	927.00M	586.00M	241.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.56B	2.41B	1.51B	2.48B	2.21B
	Total Assets
33.67B	30.69B	28.58B	28.38B	27.07B
	Total Debt
4.70B	4.93B	4.61B	5.67B	5.70B
	Net Debt
2.14B	2.52B	3.10B	3.19B	3.49B
	Total Liabilities
23.47B	22.13B	20.53B	21.54B	21.44B
	Stockholders Equity
8.99B	7.80B	7.18B	6.43B	5.27B
Cash Flow		Free Cash Flow
646.00M	404.00M	523.00M	190.00M	-36.00M
	Operating Cash Flow
1.54B	1.19B	1.28B	805.00M	275.00M
	Investing Cash Flow
-753.00M	-262.00M	-924.00M	-604.00M	-438.00M
	Financing Cash Flow
-678.00M	-12.00M	-1.40B	30.00M	460.00M

Leonardo SpA Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price21.32

Price Trends

50DMA

20.92

Positive

100DMA

17.33

Positive

200DMA

14.62

Positive

Market Momentum

MACD

1.26

Positive

RSI

62.39

Neutral

STOCH

18.87

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FINMY, the sentiment is Neutral. The current price of 21.32 is below the 20-day moving average (MA) of 24.50, above the 50-day MA of 20.92, and above the 200-day MA of 14.62, indicating a neutral trend. The MACD of 1.26 indicates Positive momentum. The RSI at 62.39 is Neutral, neither overbought nor oversold. The STOCH value of 18.87 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FINMY.

Leonardo SpA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FINMY	78 Outperform	$24.74B	21.14	12.94%	0.46%	16.23%	63.13%
NOC	78 Outperform	$70.28B	17.13	27.75%	1.71%	4.44%	110.33%
RTX	77 Outperform	$156.81B	33.06	7.96%	2.15%	17.15%	58.66%
GD	75 Outperform	$67.10B	18.34	17.44%	2.27%	12.88%	13.78%
LMT	74 Outperform	$101.72B	19.37	81.04%	2.99%	5.14%	-19.14%
Sector *	62 Neutral	$7.16B	12.21	3.05%	3.43%	3.62%	-14.48%
BA	39 Underperform	$102.77B	―	-162.23%	―	-14.49%	-399.90%

* Industrials Sector Average

Performance Comparison

FINMY

Leonardo SpA

22.89

11.36

98.53%

Boeing

139.39

-35.24

-20.18%

General Dynamics

254.40

-29.89

-10.51%

LMT

Lockheed Martin

443.36

3.19

0.72%

NOC

Northrop Grumman

491.97

41.80

9.29%

RTX

120.46

21.28

21.46%

Leonardo SpA Earnings Call Summary

Earnings Call Date: Feb 20, 2025 | % Change Since: 13.89% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Positive

The earnings call presented a very positive outlook, with record-breaking orders, substantial revenue growth, and strong performance across several divisions. However, challenges remain in the Aerostructures and SATCOM businesses. Overall, the positive aspects significantly outweigh the negative ones, indicating a promising future for the company.

Highlights

Record-Breaking Orders

New orders exceeded €20.9 billion, a 12.2% increase over 2023, setting a new record for the company.

Significant Revenue Growth

Revenues grew from €16 billion to €17.8 billion, marking an 11% increase compared to last year.

EBITDA and Net Debt Improvement

EBITDA increased by 12.9% to €1.52 billion, and net debt was reduced by 22.7% from €2.3 billion to €1.8 billion.

Substantial Free Operating Cash Flow Increase

Free operating cash flow increased by 26.7% to €826 million, significantly exceeding the guidance of €770 million.

Strong Performance in Electronics and Helicopters

Electronics saw an order growth of nearly 12% and EBITDA growth of 21%. Helicopters achieved a 6% increase in orders and an 11% increase in revenues.

Sustainability Achievements

Scope 1 and 2 market-based emissions reduced by 4.4%, and water withdrawal reduced by 5.7%. Gender equality improvements with 17.7% of female managers, up 15% from 2023.

Lowlights

Challenges in Aerostructures Division

Losses due to Boeing crisis affected the Aerostructures division, with ongoing efforts to find solutions.

SATCOM Business Challenges

The SATCOM business faced difficulties due to issues with the space alliance with Thales.

Company Guidance

In the recent call detailing the preliminary results for fiscal year 2024, Leonardo reported a robust performance across various metrics. New orders surged to €20.9 billion, marking a 12.2% increase compared to 2023, contributing to an increased backlog of over €44 billion. Revenues rose by 11% to reach €17.8 billion, while EBITDA saw a 12.9% boost to €1.52 billion, resulting in a return on sales of 8.6%. The company also highlighted a significant improvement in free operating cash flow, which jumped 26.7% to €826 million, surpassing its guidance of €770 million. Net debt was reduced by approximately 22.7% from €2.3 billion to €1.8 billion. Leonardo noted strong sectoral performances, particularly in Defense Electronics and Helicopters, while also managing challenges in its Aerostructures and SATCOM businesses. Additionally, the company achieved €191 million in savings, exceeding its €150 million target for 2024, and announced plans to update its industrial plan on March 11, 2024, including guidance for 2025 and medium-term targets.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.