Leonardo (AO) | Buy | Positive speech by the CFO, waiting for Mariani's first interviews

Research evidence excerpt

Leonardo (AO) | Buy | Positive speech by the CFO, waiting for Mariani's first interviews

Leonardo Buy | Target Price: EUR75.00

Company description Management

Leonardo develops and manufactures structural components and electronic Stefano Pontecorvo, Chairman

solutions for commercial and military aircraft, space systems, and air defence Roberto Cingolani, CEO

systems. Its three main strategic pillars are Helicopters, Defence Electronics & Giuseppe Aurilio, CFO

Security, and Aerospace. Leonardo was listed on the Milan Stock Exchange in Key shareholders

2000. Free float 69.30%

Italian Government 30.20%

Treasury shares 0.50%

Investment case Valuation methodology

The outlook in military and governmental is robust, boosted by Our EV/CE versus ROCE WACC approach for 2025/27E points to a

higher defence budgets and growing cybersecurity. The new fair value in the EUR48-52/share range.

management team headed by CEO Roberto Cingolani and the Our EUR75 TP is based on our SOP. It includes IDV. We include a

appointment of four activist members to the board might lead detailed valuation for strategic associates and some safety

to a more focused approach. plugs.

The improvement in the small and loss-making aerostructures For 2026/28E, the stock continues to trade at a discount vs. peer

business has been further postponed. Its deconsolidation might multiples, which now looks less justified, as we expect FOCF to

act as a positive catalyst. continue improving.

We expect a continuing improvement in FOCF, which we expect Risks to our rating

to reach >EUR1.8bn by 2030. We believe the acquisition of Iveco FCF deterioration/boost or a slower/faster improvement.

Defence is a sensible move. The business plan points to 2x FOCF Failure to improve profitability (or to deconsolidate) in the civil