The Bull Case For Leonardo DRS (DRS) Could Change Following Saudi Defense Modernization MOI - Learn Why

• Leonardo DRS, Inc. recently signed a Memorandum of Intent with Saudi Arabia’s Ministry of Defense to explore advanced network computing, combat computing, and ground vehicle modernization solutions supporting the Kingdom’s Vision 2030 defense roadmap.
• This agreement highlights Leonardo DRS’s push to deepen its role in Middle Eastern defense modernization, potentially broadening demand for its battlefield computing and C6ISR technologies.
• We’ll now look at how this Saudi defense MOI, centered on advanced combat computing and vehicle modernization, may influence Leonardo DRS’s investment narrative.

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Leonardo DRS Investment Narrative Recap

To own Leonardo DRS, you really need to believe that rising demand for advanced battlefield computing, C6ISR, and counter UAS technology can support continued contract wins and margin resilience. The Saudi Vision 2030 MOI slightly strengthens the near term catalyst of international growth and backlog expansion, while adding a new angle to the existing key risk around reliance on large government budgets and long procurement cycles.

The Axon Vision cooperation on AI enabled situational awareness and counter UAS systems ties directly into the same core capability set highlighted by the Saudi MOI, reinforcing the importance of DRS’s combat computing and sensor integration franchise for future program opportunities. Together, these announcements sit alongside higher R&D spending as a potential driver of participation in next generation defense programs, even as concentrated exposure to major U.S. contracts remains a central sensitivity.

Yet while international expansion can help diversify revenue, investors should be aware that concentrated exposure to a few large government programs means...

Read the full narrative on Leonardo DRS (it's free!)

Leonardo DRS' narrative projects $4.1 billion revenue and $351.1 million earnings by 2028. This requires 6.6% yearly revenue growth and about a $101 million earnings increase from $250.0 million today.

Uncover how Leonardo DRS' forecasts yield a $47.30 fair value, a 36% upside to its current price.

Exploring Other Perspectives

Nine members of the Simply Wall St Community currently peg Leonardo DRS’s fair value anywhere between US$15 and about US$373, highlighting very different expectations. Against that wide spread, the company’s push into Middle Eastern defense modernization and counter UAS programs could matter a lot for how its future earnings power is ultimately judged.

Explore 9 other fair value estimates on Leonardo DRS - why the stock might be worth less than half the current price!

Build Your Own Leonardo DRS Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Leonardo DRS research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Leonardo DRS research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Leonardo DRS' overall financial health at a glance.

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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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