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Leonardo SpA (FINMY)
OTHER OTC:FINMY
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Leonardo SpA
(OTC:FINMY)
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Rating:76Outperform
Price Target:
$38.00
▲(43.88% Upside)
Action:ReiteratedDate:11/06/25
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 & Margin Expansion
Sustained double-digit revenue growth with expanding gross and net margins indicates structural demand across key segments and improved operational efficiency. This supports durable profit generation, stronger cash flows and reinvestment capacity over the next several quarters.
Cash Generation
Material free cash flow improvement and high cash conversion demonstrate the firm's ability to turn profits into liquidity. Strong cash generation underpins deleveraging, funds capex and R&D, and provides resilience to cyclical defense spending, improving long-term financial flexibility.
Backlog & Diversification
A EUR 47bn backlog provides multi-year visibility into revenues and supports sustained production and services demand. Coupled with diversified growth in helicopters, defense electronics and cybersecurity, this reduces single-market risk and underpins stable medium-term revenue profiles.
Negative Factors
High Absolute Debt Levels
Although leverage ratios have improved, substantial absolute debt can limit strategic optionality, increase interest expense sensitivity to rates, and constrain capital allocation. Persistent high debt raises refinancing and covenant risks that could influence investment and dividends.
Operational Losses in Aerostructures
Multi-year restructuring and production ramp challenges in aerostructures create recurring drag on margins and require cash to rectify. If not resolved, these operational weak spots can erode divisional profitability and pressure consolidated margins and free cash flow in the medium term.
NH90 Settlement Cash Outflow
A confirmed EUR 125m cash settlement is a concrete near-term hit to free cash flow and reduces available liquidity for investment or debt paydown. This one-off outflow tightens financial headroom and may delay deleveraging or capex plans, affecting medium-term financial flexibility.
Leonardo SpA (FINMY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$37.89B
Dividend Yield1.04%
Average Volume (3M)20.31K
Price to Earnings (P/E)55.4
Beta (1Y)0.71
Revenue Growth14.75%
EPS Growth6.57%
CountryUS
Employees60,288
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.43
Shares Outstanding1,156,300,800
10 Day Avg. Volume22,948
30 Day Avg. Volume20,309
Financial Highlights & Ratios
PEG Ratio0.17
Price to Book (P/B)1.67
Price to Sales (P/S)0.85
P/FCF Ratio23.24
Enterprise Value/Market Cap0.93
Enterprise Value/Revenue3.36
Enterprise Value/Gross Profit27.53
Enterprise Value/Ebitda18.87
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.32
Revenue Forecast (FY)$24.71B
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 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 Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call presents a strong operational and financial improvement story: double‑digit revenue and orders growth, meaningful EBITA expansion, record free operating cash flow above EUR 1 billion, and a large reduction in net debt. Strategic progress includes portfolio rationalization, digital/AI investments, scaled Cybersecurity and Space businesses, workforce transformation, and active M&A (Iveco, Aerostructures). Material challenges remain in Aerostructures (losses and turnaround work), translation/JV tax impacts (MBDA and DRS FX), TAS recovering, and execution/timing risk around the Iveco/Rheinmetall antitrust process and Aerostructures JV finalization. On balance, the highlights substantially outweigh the lowlights due to strong profitability, cash generation and balance sheet repair combined with clear strategic momentum.Q4-2025 Updates
Positive Updates
Orders Growth and Strong Backlog
Orders of EUR 23.8 billion in 2025, up ~14% year‑over‑year (from EUR 20.8 billion); book‑to‑bill ~1.2 and total backlog at EUR 47 billion. Management noted 3‑year orders growth of ~38% (from ~EUR 17 billion to ~EUR 24 billion).
Revenue Expansion
Revenues of EUR 19.5 billion in 2025, up ~11% year‑over‑year (from EUR 17.6 billion) and above updated guidance (EUR 18.6 billion); 3‑year revenue growth ~33% (EUR 14.7 billion to EUR 19.5 billion).
EBITA and Margin Improvement
EBITA increased to EUR 1.75 billion (+18% YoY vs EUR 1.48 billion) and return on sales improved by ~60 basis points (from 8.4% to ~9.0%), outperforming updated guidance (EBITA guidance EUR 1.66 billion).
Record Free Operating Cash Flow and Net Debt Reduction
Free operating cash flow exceeded the EUR 1 billion threshold (best ever), up strongly vs prior years (three‑year FOCF growth ~88% from EUR 0.5bn to EUR 1.0bn). Group net debt reduced by 44% YoY to ~EUR 1.0 billion (from EUR 1.8 billion) and down ~67% vs three years ago (EUR 3.0bn → EUR 1.0bn).
Strong Operational Execution Across Key Divisions
Double‑digit revenue growth across major divisions: Defense Electronics & Security, Helicopters (+11% revenues), Aeronautics (solid program performance), and Space (revenues/orders ~EUR 1.0 billion). Bookings growth was broad‑based with notable Aeronautics export wins (e.g., Kuwait support order).
Cybersecurity and Space Momentum
Cybersecurity orders and revenues scaled rapidly (orders now ~EUR 1.0 billion; revenues up ~63% YoY). Space revenues increased ~90% YoY; Space is now a standalone division with significant growth and improved TAS performance (TAS loss reduced from ~EUR 50m to ~EUR 23m).
Strategic Portfolio, Digital and AI Investments
Portfolio rationalization and strategic partnerships progressed (drones with Baykar, GCAP/Edgewing). R&D investment up ~20% YoY, R&D spend ~15% of revenues. Digital/AI/capacity investments include doubling compute/storage (daVinci‑2 supercomputer), ~2,200 people using AI and ~200 AI developers, and >300 capacity‑boost pilot programs.
Human Capital and Shareholder Returns
Workforce grew from ~50,000 to ~73,000 (+22%), with ~17,000 net hires over 3 years (~70% STEM, >30% women, ~55% under 30). Dividend per share increased from ~EUR 0.14 to EUR 0.52 (management highlighted multi‑year CAGR and intends a further ~20% increase subject to net income).
M&A / Industrial Expansion Progress
Iveco acquisition expected to close by March; initial integration and order backlog appear sound (truck margins ~12–13%). Aerostructures transaction progressed through due diligence (14 months, ~70 items assessed) with an intended 50/50 JV start and exclusivity through June; management expects a materially larger global aerostructures entity and positive 2026 impact once closed.
Negative Updates
Aerostructures Unit Losses and Uncertainty
Aerostructures reported an EBITA loss of ~EUR 130 million in 2025; free operating cash flow estimated negative ~EUR 0.2 billion stand‑alone. Q4 showed breakeven after release of contingencies (~EUR 15–20 million), but management expects Aerostructures to remain loss‑making into 2026 and investment/turnaround is required. JV negotiation and political/incentive steps remain outstanding (exclusivity to June).
Translation and JV Net Contribution Headwinds
Leonardo DRS performance was negatively affected by USD translation (reported negative year‑on‑year on a translated basis despite underlying growth). MBDA contributed ~EUR 20 million less YoY to Leonardo's net due to higher net tax charges in France (tax reform), reducing the consolidated JV benefit.
Seasonality and Working Capital Profile
Free operating cash flow and cash generation remain lumpy across quarters (historical concentration in Q4); working capital had a slight negative contribution overall in 2025 (management working to make revenue/FOCF cadence more linear).
Remaining Losses in TAS and Other JV Effects
TAS (Telespazio) remains in loss albeit improved (~EUR 23 million loss vs ~EUR 50 million prior year) and is still part of the drag on Space division profitability until recovery plan completes.
Iveco Antitrust and Deal Execution Risk
While the Iveco acquisition is on track to close by March, the transaction contemplates a potential carve‑out/sale to Rheinmetall pending antitrust review (Rheinmetall has ~6 months exclusivity). This introduces execution and timing uncertainty for the final industrial structure and contribution in 2026.
Aeronautics / Electronics Margin Phasing
Certain programs (e.g., GCAP consolidation) dilute aircraft margins in the near term (GCAP revenue contribution significant but with low immediate EBITA impact), and some analysts flagged weaker Q4 electronics sales vs expectations (company cites phasing/linearization as an explanation).
Company Guidance
The call provided updated 2025 results that exceeded prior guidance and flagged that formal 2026 guidance will be presented on March 12: orders closed at EUR 23.8bn (vs guidance EUR 22–22.7bn; +14% YoY) with a backlog of EUR 47bn and a book‑to‑bill of 1.2; revenues were EUR 19.5bn (vs guidance EUR 18.6bn; +11% YoY); EBITA was EUR 1.75bn (vs guidance EUR 1.66bn; +18% YoY) with return on sales up to ~9.0% (from 8.4%, +60bps); free operating cash flow surpassed the EUR 1bn threshold (guidance EUR 0.92–0.98bn) with operating cash flow of EUR 2.3bn and capex around EUR 1bn; net debt fell to EUR 1.0bn (‑44% YoY, ‑67% from start of the mandate), group net position before JV/payables was roughly +EUR 1bn, and proceeds from the UAS sale were ~EUR 0.4bn. Division highlights included Cyber and Space at ~EUR 1bn orders each, Defense Electronics EBITA >EUR 1bn (ROS ~13%), Helicopter revenues +11% with 182 deliveries, Aerostructures FY loss ~EUR 130m but Q4 at breakeven aided by ~EUR 15–20m contingency release, cybersecurity +63% and space +90% YoY; longer‑term metrics: three‑year growth in orders ~+38% (to ~EUR 24bn), revenues +33% (to EUR 19.5bn), EBITA +44% (to EUR 1.75bn), FOCF +88% (to ~EUR 1bn), dividend up to EUR 0.52/sh (CAGR +275%) with a likely further increase (~+20% signaled), workforce 73k (+22%; net hires 17k; ~70% STEM, >30% women, 55% <30), R&D ~15% of revenues and innovation +20% YoY, and market cap cited near USD 34bn.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.85
Very Positive
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.78
Positive
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.82
Very Positive
| 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
Positive
26.41
Price Trends
32.74
Positive
30.68
Positive
29.66
Positive
Market Momentum
0.36
Positive
47.66
Neutral
39.13
Neutral
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 33.21, below the 50-day MA of 32.74, and below the 200-day MA of 29.66, indicating a neutral trend. The MACD of 0.36 indicates Positive momentum. The RSI at 47.66 is Neutral, neither overbought nor oversold. The STOCH value of 39.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FINMY.
Leonardo SpA Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $105.02B | 19.57 | 26.17% | 1.55% | -0.14% | 72.35% | |
76 Outperform | $37.89B | 55.42 | 11.69% | 1.04% | 14.75% | 6.57% | |
75 Outperform | $67.26B | 47.45 | 8.20% | 1.61% | 2.83% | 47.00% | |
74 Outperform | $97.53B | 21.58 | 17.66% | 1.73% | 11.86% | 17.39% | |
74 Outperform | $150.70B | 22.26 | 76.87% | 2.77% | 2.88% | -35.15% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $174.39B | 74.05 | 289.00% | ― | 10.19% | -6.03% |
* Industrials Sector Average
FINMY
Leonardo SpA
32.84
8.02
32.29%
BA
Boeing
222.06
63.63
40.16%
GD
General Dynamics
360.70
101.16
38.98%
LHX
L3Harris Technologies
360.10
149.46
70.95%
LMT
Lockheed Martin
655.00
205.77
45.81%
NOC
Northrop Grumman
740.01
272.33
58.23%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.