DRS Should I Buy
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Leonardo DRS Inc is a good buy for a beginner investor with a long-term horizon and $50,000-$100,000 available for investment. The company's strong financial performance, robust backlog, and positive outlook in the defense sector, coupled with favorable analyst ratings and geopolitical catalysts, make it an attractive investment opportunity despite short-term technical weakness.
The stock is currently oversold with an RSI of 17.742, indicating a potential rebound. However, the MACD histogram is negatively expanding at -0.667, suggesting bearish momentum. The stock is trading near its key support level of 41.422, which could act as a floor for price stabilization.
The largest Pentagon budget in U.S. history ($900.6 billion) signals strong growth potential for defense contractors like Leonardo DRS.
Recent subcontract award for infrared mission payloads for the Space Development Agency's Tracking Layer project.
Analysts have raised price targets, with multiple Buy ratings and a robust backlog of $8.73 billion.
Insider selling has increased by 207.26% over the last month, which could indicate a lack of confidence from internal stakeholders.
Short-term bearish technical indicators, including a negatively expanding MACD and recent price decline.
In Q3 2025, Leonardo DRS demonstrated strong financial growth: Revenue increased by 18.23% YoY to $960 million, Net Income rose by 26.32% YoY to $72 million, EPS grew by 28.57% YoY to $0.27, and Gross Margin improved by 6.05% YoY to 22.6%.
Analysts are bullish on the stock, with multiple firms raising price targets recently. BofA raised the target to $55, Truist to $59, and Canaccord to $52, all maintaining Buy ratings. Analysts cite escalating geopolitical tensions and strong demand for defense systems as key drivers for growth.
