Leonardo Spa (LDO) AI Stock Analysis

• Market Cap: €26.41B
• Dividend Yield: 1.13%
• Average Volume (3M): 2.89M
• Price to Earnings (P/E): 25.2
• Beta (1Y): 0.82
• Revenue Growth: 14.13%
• EPS Growth: 5.99%
• Country: IT
• Employees: 60,288
• Sector: Industrials
• Sector Strength: 85
• Industry: Aerospace & Defense
• EPS (TTM): 0.21
• Shares Outstanding: 578,150,400
• 10 Day Avg. Volume: 3,698,076
• 30 Day Avg. Volume: 2,894,518
• 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: €55.42
• Price Target Upside: 22.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 68 Neutral
• Price Target: €51.00 ▲(13.06% Upside)

Leonardo Spa's overall stock score is primarily driven by its strong financial performance, characterized by robust revenue and profit growth, and effective cash flow management. However, the technical analysis indicates mixed momentum signals, and the valuation suggests the stock may be overvalued, which tempers the overall score.

Positive Factors

Earnings

Leonardo's Q1 sales exceeded expectations by 6%, showcasing strong financial performance.

Guidance

The company is well on track to reach its guidance, reflecting positive operational progress.

Negative Factors

Aerostructures

The strong performance in Helicopters was partly offset by a more significant loss in Aerostructures.

Financial Performance

FOCF stood at €(580)m, which, although better than expected, still indicates negative free cash flow.

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 through multiple streams, primarily by selling defense and aerospace products and services to government and military clients around the world. Key revenue streams include the production of aircraft, helicopters, and unmanned aerial vehicles (UAVs), along with systems integration and maintenance services. The company also earns income from long-term contracts with national governments and international defense organizations, which often include services such as training and technical support. Significant partnerships with other defense contractors and collaborations on international defense programs further enhance its financial performance, allowing for shared resources and expanded market reach.

Leonardo Spa Financial Statement Overview

Summary

Leonardo Spa's financial performance is strong, characterized by robust revenue and profit growth, stable margins, and effective cash flow management. The balance sheet reflects a well-managed leverage and solid equity base. Despite the absence of EBIT margin for 2024, the overall financial health indicates resilience and positive future prospects.

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	1.66B	1.29B	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: Negative
• Last Price: 45.11
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:LDO, the sentiment is Negative. The current price of 45.11 is below the 20-day moving average (MA) of 47.47, below the 50-day MA of 47.74, and above the 200-day MA of 38.29, indicating a neutral trend. The MACD of -0.32 indicates Positive momentum. The RSI at 41.74 is Neutral, neither overbought nor oversold. The STOCH value of 19.58 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IT:LDO.

Leonardo Spa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LDO	68 Neutral	€26.41B	25.23	12.10%	1.13%	14.13%	5.99%
Sector *	64 Neutral	$10.83B	16.50	6.52%	2.09%	2.39%	-16.50%
0R9S	―	€881.10M	139.68	2.02%	―	―	―
0QWN	―	€5.43B	41.77	14.30%	―	―	―
0NUX	―	€21.03B	27.98	15.19%	―	―	―
0BJP	―	€4.15B	16.64	15.86%	―	―	―
IVG	71 Outperform	€6.35B	15.20		1.79%	-6.97%	41.29%