Leonardo S.p.a. (BIT:LDO) Just Reported And Analysts Have Been Lifting Their Price Targets

Investors in Leonardo S.p.a. (BIT:LDO) had a good week, as its shares rose 2.8% to close at €21.36 following the release of its yearly results. It was an okay report, and revenues came in at €15b, approximately in line with analyst estimates leading up to the results announcement. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Leonardo

Taking into account the latest results, the most recent consensus for Leonardo from 15 analysts is for revenues of €16.4b in 2024. If met, it would imply a modest 7.1% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 24% to €1.42. Yet prior to the latest earnings, the analysts had been anticipated revenues of €16.2b and earnings per share (EPS) of €1.43 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 7.4% to €20.38. It looks as though they previously had some doubts over whether the business would live up to their expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Leonardo, with the most bullish analyst valuing it at €27.50 and the most bearish at €16.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Leonardo shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Leonardo's past performance and to peers in the same industry. It's clear from the latest estimates that Leonardo's rate of growth is expected to accelerate meaningfully, with the forecast 7.1% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Leonardo to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Leonardo. Long-term earnings power is much more important than next year's profits. We have forecasts for Leonardo going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Leonardo you should know about.

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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.