Leonardo Spa (LDO) AI Stock Analysis

• Market Cap: €34.86B
• Dividend Yield: 1.05%
• Average Volume (3M): 3.05M
• Price to Earnings (P/E): 23.2
• Beta (1Y): 0.87
• Revenue Growth: 14.13%
• EPS Growth: 5.99%
• Country: IT
• Employees: 60,288
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.97
• Shares Outstanding: 578,150,400
• 10 Day Avg. Volume: 2,674,697
• 30 Day Avg. Volume: 3,046,617
• PEG Ratio: 1.73
• Price to Book (P/B): 2.97
• Price to Sales (P/S): 1.45
• P/FCF Ratio: 29.02
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €68.14
• Price Target Upside: 12.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 2.25
• Revenue Forecast (FY): €21.15B

• Rating: 72 Outperform
• Price Target: €70.00 ▲(15.51% Upside)
• Action: Reiterated Date: 03/20/26
• Date: Action: Reiterated 03/20/26

The score is driven primarily by strengthening financial performance (growth, improving profitability, and deleveraging) and supportive technical momentum. This is partially offset by only moderate profit-to-free-cash-flow conversion and a valuation that looks less compelling given the P/E and low dividend yield.

Positive Factors

Revenue & Profit Momentum

Sustained revenue expansion and rising net margins reflect stronger program delivery and pricing power across defense and services. Over multi-year procurement cycles this improves earnings durability, funds reinvestment into platforms and R&D, and supports steadily improving returns on equity.

Deleveraging & Balance Sheet Strength

Material reduction in leverage improves financial flexibility and lowers interest burden, enabling more stable funding for capex, program working capital, and strategic investments. A stronger balance sheet also reduces refinancing risk across defence program cycles.

Recurring Aftermarket & Services

A substantial recurring services and MRO business provides predictable, long-duration revenue tied to installed fleets. This aftermarket stream smooths cyclicality from new-build programs, enhances lifetime margins, and creates long-term customer relationships and cross-sell opportunities.

Negative Factors

Weak Cash Conversion

Relatively low and volatile FCF-to-income means earnings growth does not fully translate into discretionary cash, limiting capacity to accelerate deleveraging, fund M&A, raise dividends, or absorb program overruns. Persistent cash conversion gaps raise long-term funding risk.

Thin Gross Margins

Low gross margins restrict operating leverage and leave limited room to absorb input-cost inflation or pricing pressure on contracts. Even with revenue growth, thin unit economics constrain sustainable margin expansion and increase sensitivity of profits to cost or schedule disruptions.

High Absolute Debt

Despite improved ratios, a large nominal debt stock exposes the company to interest-rate and refinancing risk and reduces agility for large-scale investments. If profitability weakens or cash conversion falters, servicing sizable debt could strain credit metrics and strategic options.

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 makes money primarily by selling aerospace and defense products and by delivering long-term services tied to those platforms. Key revenue streams include: (1) Product sales and programs: revenues from the manufacture and delivery of helicopters (for government, emergency services, and commercial operators), defense electronics and sensor systems (e.g., radars, avionics, optronics, electronic warfare, and integrated mission systems), and aerostructures and aircraft-related components supplied to other aircraft manufacturers and programs. These revenues are typically recognized as units are delivered or as contractual milestones are achieved, often under multi-year procurement or industrial contracts. (2) Services and support: ongoing revenues from maintenance, repair and overhaul (MRO), spare parts, logistics and fleet support, training, software updates, and capability upgrades for installed fleets and deployed systems; this aftermarket activity is generally recurring and can extend for decades over a platform’s life cycle. (3) Systems integration and solutions: contract revenues from integrating multi-domain defense and security systems (e.g., command-and-control, communications, and sensor networks) and providing cybersecurity and secure digital solutions, often delivered as projects with milestone-based billing. (4) Space and collaborative programs: earnings from participation in space-related activities and from equity-accounted or jointly executed programs where Leonardo contributes technology, manufacturing, or systems and receives revenues through its share of program work or returns from participations; specific partnership structures and the proportion of earnings attributable to each collaboration are null. (5) Government-driven demand and export markets: a significant portion of earnings is influenced by defense and security budgets, procurement cycles, and export orders; contract mix, delivery schedules, and geopolitical factors can materially impact annual revenue timing. Significant partnership details beyond general collaborative participation are null.

Leonardo Spa Financial Statement Overview

Summary

Overall fundamentals are improving: strong revenue growth, rising net margin (~4.3% in 2023 to ~6.3% in 2025), and a healthier balance sheet with materially lower leverage (debt/equity down to ~0.47x in 2025). The key constraint is cash-flow quality: free cash flow is improving but only ~50% of net income in 2025 and has been volatile historically.

Income Statement

Revenue expanded strongly from 2023–2025, with 2025 showing a step-up versus 2024. Profitability is solid and improving: net profit margin rose from ~4.3% (2023) to ~6.3% (2025), and EBIT margin remained healthy around ~7–9% over the last several years. The main offset is that gross margin is relatively thin (~8% in 2024–2025) and has not structurally expanded versus 2023, which limits operating leverage despite higher scale.

Balance Sheet

Leverage is moderate and improving: debt relative to equity declined meaningfully from ~1.08x (2020) to ~0.47x (2025), reflecting balance sheet strengthening alongside equity growth. Returns on equity are attractive and improving versus the 2020–2023 period (up to ~12.8% in 2025). The key risk is that absolute debt remains sizable (~€4.5B in 2025), so the company is still exposed to financing costs and any profitability volatility.

Cash Flow

Cash generation is positive and trending better: operating cash flow increased from ~€1.2B (2023) to ~€2.0B (2025), and free cash flow improved to ~€1.0B in 2025 with positive growth. However, free cash flow covers only about half of net income in 2025 (and was lower in prior years), indicating earnings are not fully translating into discretionary cash. Free cash flow volatility is also a watch item given the negative result in 2020 and uneven growth rates across the period.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	19.50B	17.76B	15.29B	14.71B	14.13B
Gross Profit	1.57B	1.45B	1.65B	1.22B	1.05B
EBITDA	2.27B	2.25B	1.54B	1.65B	1.38B
Net Income	1.22B	1.07B	658.00M	927.00M	586.00M
Balance Sheet
Total Assets	34.51B	33.67B	30.69B	28.58B	28.38B
Cash, Cash Equivalents and Short-Term Investments	3.24B	2.56B	2.41B	1.51B	2.48B
Total Debt	4.49B	4.70B	4.93B	4.61B	5.67B
Total Liabilities	23.77B	23.47B	22.13B	20.53B	21.54B
Stockholders Equity	9.56B	8.99B	7.80B	7.18B	6.43B
Cash Flow
Free Cash Flow	977.00M	646.00M	404.00M	523.00M	190.00M
Operating Cash Flow	1.99B	1.54B	1.19B	1.28B	805.00M
Investing Cash Flow	-605.00M	-753.00M	-262.00M	-924.00M	-604.00M
Financing Cash Flow	-611.00M	-678.00M	-12.00M	-1.40B	30.00M

Leonardo Spa Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 60.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:LDO, the sentiment is Positive. The current price of 60.6 is above the 20-day moving average (MA) of 60.38, above the 50-day MA of 58.14, and above the 200-day MA of 51.43, indicating a bullish trend. The MACD of 1.75 indicates Negative momentum. The RSI at 51.67 is Neutral, neither overbought nor oversold. The STOCH value of 52.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:LDO.

Leonardo Spa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRY	77 Outperform	€26.93B	28.66	22.15%	0.93%	21.75%	92.91%
AVIO	74 Outperform	€1.60B	83.86	1.96%	0.41%	32.64%	-38.77%
WBD	73 Outperform	€2.24B	7.65	15.02%	2.32%	21.15%	17.26%
LDO	72 Outperform	€34.86B	23.17	12.10%	1.05%	14.13%	5.99%
FCT	66 Neutral	€4.51B	71.84	14.30%	―	18.44%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
IVG	57 Neutral	€6.61B	17.54	―	1.76%	-7.26%	14.20%