Leonardo Spa (LDO) AI Stock Analysis

• Market Cap: €33.21B
• Dividend Yield: 1.05%
• Average Volume (3M): 3.05M
• Price to Earnings (P/E): 31.7
• Beta (1Y): 0.98
• Revenue Growth: 14.13%
• EPS Growth: 5.99%
• Country: US
• Employees: 60,288
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.31
• Shares Outstanding: 578,150,400
• 10 Day Avg. Volume: 2,674,697
• 30 Day Avg. Volume: 3,046,617
• PEG Ratio: 0.22
• Price to Book (P/B): 1.66
• Price to Sales (P/S): 0.84
• P/FCF Ratio: 23.09
• 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: €60.67
• Price Target Upside: 5.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: €66.00 ▲(14.31% Upside)

The score is driven primarily by strong financial performance (growth, improving profitability, and robust cash flow) and supportive trend indicators. This is tempered by elevated valuation (high P/E with a low dividend yield) and stretched momentum signals (RSI/Stoch), which raise near-term downside risk.

Positive Factors

Stable government contract revenue

Leonardo's revenue model centers on long-term government and defense contracts, creating recurring, multiyear cash inflows. This underpins predictable backlog, supports investment planning and R&D, and reduces revenue volatility versus commercial-only peers over a multi-quarter horizon.

Strong cash generation

Material FCF growth and an operating cashflow-to-net-income ratio above 1 indicate robust cash conversion from operations. Durable cash generation supports capex, R&D and debt repayment, improving financial flexibility and enabling sustained investment in product development and service contracts.

Moderate leverage with improving ROE

A balanced leverage profile and near-12% ROE reflect disciplined capital structure and effective equity utilization. Manageable debt levels lower refinancing risk and, combined with healthy returns, support resilience through defense budget cycles and underpin long-term strategic initiatives.

Negative Factors

Relatively low gross margin

An ~11% gross margin is modest for aerospace suppliers and may limit operating leverage. Sustaining investment in R&D and advanced systems while expanding margins will be challenging; lower margin room increases sensitivity to cost inflation and contract pricing pressures over time.

Customer concentration on governments

High dependence on government and defense buyers concentrates revenue risk to procurement cycles, budget shifts and political decisions. Contract renewals and export approvals can be lumpy, making multi-quarter revenue visibility contingent on external policy and funding dynamics.

Missing EBIT margin disclosure for 2024

Lack of reported 2024 EBIT margin reduces transparency on core operating profitability and cost structure. This hampers assessment of operational efficiency trends and comparability with peers, complicating medium-term forecasts and strategic margin-improvement monitoring.

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 and aerospace products and services. The company’s revenue model includes long-term contracts with government entities and defense agencies, which provide a stable income stream. Key revenue streams consist of the sale of military aircraft, naval vessels, and electronic systems, as well as maintenance and support services. Significant partnerships with governments and defense organizations across Europe, North America, and beyond enhance its earnings potential. Additionally, Leonardo benefits from research and development collaborations with other aerospace and technology firms, further diversifying its sources of income.

Leonardo Spa Financial Statement Overview

Summary

Strong overall fundamentals: revenue rose ~16.2% (2023–2024) and net margin improved to ~6.05%. Cash generation is solid with free cash flow up ~59.9% and operating cash flow running ~1.43x net income. Balance sheet leverage is manageable (debt-to-equity ~0.52) with improving ROE (~11.95%), though missing 2024 EBIT margin limits full operating efficiency assessment.

Income Statement

Leonardo Spa has demonstrated strong revenue growth from 2023 to 2024, increasing by approximately 16.2%. The gross profit margin in 2024 stands at about 11.35%, showing stability over the years. Net profit margin has improved significantly to around 6.05%. However, EBIT margin is not available for 2024, which hampers a complete analysis of operational efficiency.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of approximately 0.52, indicating a balanced leverage position. Return on equity has improved to around 11.95%, reflecting effective equity utilization. The equity ratio is approximately 26.7%, exhibiting a solid capital structure. Overall, the balance sheet shows a stable financial position with manageable debt levels.

Cash Flow

Leonardo Spa has shown a healthy growth in free cash flow from 2023 to 2024, increasing by about 59.9%. The operating cash flow to net income ratio is approximately 1.43, indicating robust cash generation relative to net earnings. The free cash flow to net income ratio of 0.6 demonstrates effective cash flow management, supporting future investments and debt repayments.

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	1.45B	1.65B	1.22B	1.05B	1.03B
EBITDA	1.82B	2.25B	1.54B	1.65B	1.38B	974.00M
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	20.53B	21.54B	21.44B
Stockholders Equity	9.00B	8.99B	7.80B	7.18B	6.43B	5.27B
Cash Flow
Free Cash Flow	887.00M	646.00M	404.00M	523.00M	190.00M	-36.00M
Operating Cash Flow	2.15B	1.54B	1.19B	1.28B	805.00M	275.00M
Investing Cash Flow	-542.00M	-753.00M	-262.00M	-924.00M	-604.00M	-438.00M
Financing Cash Flow	-159.00M	-678.00M	-12.00M	-1.40B	30.00M	460.00M

Leonardo Spa Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 57.74
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 57.74 is above the 20-day moving average (MA) of 57.08, above the 50-day MA of 51.55, and above the 200-day MA of 49.58, indicating a bullish trend. The MACD of 1.88 indicates Positive momentum. The RSI at 59.34 is Neutral, neither overbought nor oversold. The STOCH value of 26.70 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
WBD	73 Outperform	€3.53B	14.11	15.86%	2.32%	21.15%	17.26%
LDO	72 Outperform	€33.21B	31.72	12.10%	1.05%	14.13%	5.99%
FCT	66 Neutral	€5.40B	41.82	14.30%	―	18.44%	―
PRY	65 Neutral	€28.53B	25.18	21.00%	0.93%	21.75%	92.91%
IVG	65 Neutral	€6.49B	18.97	―	1.76%	-7.26%	14.20%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AVIO	62 Neutral	€1.55B	178.08	1.96%	0.41%	32.64%	-38.77%