Leonardo (BIT:LDO) Valuation: Assessing Shares as Electric Aircraft Opportunities Draw Investor Interest

Recent developments in the commercial electric aircraft market are catching investors’ attention, with Leonardo (BIT:LDO) at the forefront. Factors such as zero emissions, quieter operations, and new battery technologies are setting the stage for expanded demand.

See our latest analysis for Leonardo.

Leonardo’s shares have edged upward over the past year, with the stock currently trading at €55.8. This has helped deliver a 1.7% total shareholder return for investors. Recent momentum appears steady rather than explosive, as market excitement around zero-emission tech and regulatory tailwinds has been balanced with a cautious view on near-term growth.

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Yet, with strong annual growth in revenue and profits, but the share price now hovering just above analysts’ targets, investors face a familiar question: is there hidden value left to unlock, or is future growth already fully factored in?

Most Popular Narrative: 4.5% Overvalued

The current share price of €55.8 sits slightly above the widely followed narrative’s fair value estimate of €53.38. With the market showing high confidence in defense-driven growth, understanding the assumptions behind this fair value is key.

Ongoing operational optimization, digitalization of manufacturing processes, and a company-wide "capacity boost" program are yielding measurable gains in profitability and efficiency, evidenced by EBITA and free cash flow growing faster than revenues. This trajectory suggests improving net margins and cash conversion over the medium term.

Read the complete narrative.

Curious about what is powering this premium price? The big assumptions and bold growth levers that justify such an aggressive outlook might surprise you. There is more to this story: unpack the narrative to see the projections that shape the fair value above where the stock trades today.

Result: Fair Value of €53.38 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weakness in the Aerostructures division or setbacks integrating new acquisitions could put pressure on group margins and challenge upbeat growth assumptions.

Find out about the key risks to this Leonardo narrative.

Another View: Market Ratios Suggest Room for Upside

Looking beyond analyst targets, Leonardo trades at a price-to-earnings ratio of 30.7x, which is lower than both the European Aerospace & Defense industry average of 34.3x and the peer average of 54x. Notably, this is almost aligned with the fair ratio of 31.7x. This suggests the company is priced attractively by market standards and may offer some valuation upside if sentiment shifts. Does this mean investors are underestimating future potential, or is the current cautious mood justified?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Leonardo Narrative

For those who want to dig deeper or prefer reaching their own conclusions, it takes just a few minutes to build your personal investment narrative. Do it your way

A great starting point for your Leonardo research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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