Leonardo Shares Are Up 17% in 2026. Is This Defense Stock a Buy?

Why It Matters

Leonardo’s strong earnings and strategic pivot signal a potentially durable defense play, but its near‑fair‑value price forces investors to assess whether further upside justifies entry.

Key Takeaways

• Leonardo revenue up 11% YoY, profit up 18% in 2026
• New orders rise 15% as geopolitical tensions boost demand
• Shift toward integrated security, software over hardware drives growth
• Morningstar maintains €62.20 fair value, near all‑time high
• Upcoming joint venture may improve loss‑making aerostructures segment

Summary

Leonardo (LDO) surged 17% in 2026, positioning itself among Europe’s top‑performing defense equities. The rally follows a stronger-than‑expected 2025 earnings release and reflects heightened demand driven by fresh Middle‑East conflicts and broader geopolitical tension.

The company posted 11% year‑on‑year revenue growth, an 18% jump in operating profit and a 15% increase in new orders. All four divisions—helicopters, defense, electronics and security—contributed, while debt fell as cash flow improved.

Morningstar analyst Loredana Marjoram highlighted an inflection point in Leonardo’s multi‑year shift from legacy hardware to integrated security, cyber and software solutions, noting better portfolio mix and capital discipline. Morningstar kept its €62.20 fair‑value target, citing structural defense spending and a pending joint‑venture to revive the loss‑making aerostructures unit.

At roughly €60 per share, the stock trades near its all‑time high and fair‑value estimate, making the timing of a purchase ambiguous. Continued geopolitical flare‑ups could sustain order flow, but investors must weigh valuation proximity against the company’s strategic transformation.

Original Description

Leonardo’s stock is hovering at an all-time high, as geopolitical tensions fuel defence spending, and an internal overhaul gains pace.

http://www.morningstar.co.uk

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