Leonardo is back in the spotlight at Business Square. At 11.30 the stock is achieving one of the best performances in the Ftse Mib (+1,2%) rising by 3,58% to € 25,57 per share after having reached a maximum of 25,99 euros. A rise that adds to those of last week when, in the wake of the quarterly accounts, the stock gained 13,7% of its value. Leonardo's ride does not end here: since the beginning of the year, shares rose more than 70%, achieving the third best performance in the ranking of increases (behind Unipol and MPS) among the blue chips.
UK confirms Global combat air programme
Today's increases are based on the cUK confirms commitment to Tempes programmet for the construction of the new generation fighter together with Italy and Japan within the framework of the Global combat air programme (Gcap). There were fears that the project could be cancelled due to the cuts in defence spending announced by the new Labour government. During a hearing in Parliament held last Friday, however, Defence Minister Maria Eagle dispelled any doubts, reiterating that the project is “crucial to maintain the country's air combat capabilities in cooperation with international partners."
Il Financial Times reports that the British government would have given Green light for the Gcap program Tuesday 6 November. “The news is important and positive because the new British government had shown some doubts about numerous military programs, including the Gcap”, underline the analysts of Banca Akros.
It should arrive in the next few weeks a formal announcement for the multi-billion pound fighter jet programme, which will also involve Leonardo, Britain's Bae Systems and Rolls-Royce and Japan's Mitsubishi Heavy Industries.
Rain of promotions for Leonardo
Furthermore, the support of the Leonardo title continues quarterly accounts, which they brought Bernstein, Mediobanca Research and Equita to revise the target price upwards. The first two brought the target price to 30 euros, with an outperform rating, the third to 27,5 euros with a buy rating.
According to Bernstein, the company led by Roberto Cingolani is becoming a higher performing company, while Mediobanca analysts believe that "an improvement in Leonardo's guidance for the period 2025-2028 is possible. More importantly, we believe that the outcome of the recent elections in the United States will likely be significant for the European Union defense sector, and in particular for Leonardo. This could translate into a stronger push also in Italy to accelerate the increase in defense spending, which is still significantly below the NATO target of 2% of GDP”. “Consequently – the analysts explained – we are revising our estimates upwards and the target price by 7%, bringing it to 30 euros per share. Not to mention that, based on our estimates, the stock continues to trade at a strong and, in our view, unjustified discount compared to competitors. Therefore, we reiterate our outperform rating”.
“Following the third quarter results, we are leaving the group's estimates substantially unchanged, even though we perceive there is further upside potential from the desire to accelerate the cost-saving plan and from the finalization of the joint venture with Rheinmetall", write the experts at Equita.
