Leonardo SpA (FINMY) AI Stock Analysis

• Market Cap: $39.28B
• Dividend Yield: 1.04%
• Average Volume (3M): 6.51K
• Price to Earnings (P/E): 34.7
• Beta (1Y): 0.68
• Revenue Growth: 14.75%
• EPS Growth: 6.57%
• Country: US
• Employees: 60,288
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.18
• Shares Outstanding: 1,156,300,800
• 10 Day Avg. Volume: 18,323
• 30 Day Avg. Volume: 6,513
• PEG Ratio: 0.17
• Price to Book (P/B): 1.67
• Price to Sales (P/S): 0.85
• P/FCF Ratio: 23.24
• Enterprise Value/Market Cap: 0.76
• Enterprise Value/Revenue: 2.86
• Enterprise Value/Gross Profit: 23.45
• Enterprise Value/Ebitda: 16.08
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 1.31
• Revenue Forecast (FY): $24.31B

• Rating: 76 Outperform
• Price Target: $39.00 ▲(47.67% Upside)

Leonardo SpA's strong financial performance and positive earnings call are the most significant factors driving the stock score. The company has shown robust growth in revenue and profitability, along with effective debt reduction. However, technical analysis indicates short-term bearish momentum, and the stock's valuation appears high, which moderates the overall score.

Positive Factors

Revenue Growth

Leonardo's significant revenue growth indicates strong market demand and effective sales strategies, enhancing its competitive position.

Debt Reduction

Reducing net debt strengthens Leonardo's balance sheet, improving financial flexibility and reducing interest burden, supporting long-term stability.

Strategic Partnerships

The partnership with Airbus and Thales aims to enhance strategic autonomy in space, expanding market reach and innovation potential.

Negative Factors

Aerostructures Challenges

Ongoing losses in Aerostructures indicate operational inefficiencies, potentially hindering profitability and requiring strategic adjustments.

ATR Losses

Negative contributions from ATR highlight supply chain issues, which may continue to affect operational performance and financial results.

NH90 Settlement Impact

The NH90 settlement's cash outflow could strain cash flows, impacting financial flexibility and investment capacity in the near term.

Leonardo SpA Business Overview & Revenue Model

Company Description

Leonardo 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 Money

Leonardo SpA generates revenue primarily through the sale of defense equipment, systems integration services, and ongoing maintenance contracts. The company's revenue model is heavily reliant on long-term contracts with government agencies and defense ministries around the world, which provide a stable income stream. Key revenue streams include the production and sale of military aircraft, naval vessels, and electronic systems. Additionally, Leonardo benefits from partnerships with other defense contractors and strategic alliances that enhance its product offerings and market reach. The company also generates income through research and development projects funded by government and international contracts, as well as sales of commercial aviation products and services.

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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.45B	17.76B	15.29B	14.71B	14.13B	13.41B
Gross Profit	1.28B	2.02B	1.65B	1.22B	1.05B	1.03B
EBITDA	1.86B	2.25B	1.54B	1.65B	1.38B	1.22B
Net Income	519.00M	1.07B	658.00M	927.00M	586.00M	241.00M
Balance Sheet
Total Assets	32.70B	33.67B	30.69B	28.58B	28.38B	27.07B
Cash, Cash Equivalents and Short-Term Investments	1.81B	2.56B	2.41B	1.51B	2.48B	2.21B
Total Debt	4.25B	4.70B	4.93B	4.61B	5.67B	5.70B
Total Liabilities	22.57B	23.47B	22.13B	20.88B	21.54B	21.44B
Stockholders Equity	9.00B	8.99B	7.80B	7.18B	6.43B	5.27B
Cash Flow
Free Cash Flow	627.00M	646.00M	404.00M	523.00M	190.00M	-36.00M
Operating Cash Flow	1.90B	1.54B	1.19B	1.28B	805.00M	275.00M
Investing Cash Flow	-197.00M	-753.00M	-262.00M	-924.00M	-604.00M	-438.00M
Financing Cash Flow	-80.00M	-678.00M	-12.00M	-1.40B	30.00M	460.00M

Leonardo SpA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FINMY, the sentiment is Positive. The current price of 26.41 is below the 20-day moving average (MA) of 30.34, below the 50-day MA of 29.05, and below the 200-day MA of 28.21, indicating a bullish trend. The MACD of 1.56 indicates Negative momentum. The RSI at 79.12 is Negative, neither overbought nor oversold. The STOCH value of 99.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FINMY.

Leonardo SpA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GD	80 Outperform	$97.50B	23.54	17.78%	1.73%	11.86%	17.39%
NOC	76 Outperform	$89.82B	22.45	26.15%	1.55%	-0.14%	72.35%
FINMY	76 Outperform	$39.28B	34.73	11.69%	1.04%	14.75%	6.57%
LHX	74 Outperform	$63.73B	36.64	9.13%	1.61%	2.83%	47.00%
LMT	70 Outperform	$127.56B	31.17	62.78%	2.77%	2.88%	-35.15%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BA	54 Neutral	$187.79B	-17.87	―	―	10.19%	-6.03%