Leonardo Aims to Double Profits by 2030 Amid Defense Sector Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 hours ago
0mins
Source: CNBC
- Strong Growth Outlook: Leonardo stated on Thursday that it aims to double profits by 2030, driven by surging defense demand from the Ukraine war and the Iran conflict, highlighting its robust growth potential in the defense sector.
- Record Order Backlogs: Both Leonardo and German peer Rheinmetall reported record-high order backlogs, with Leonardo's CEO noting that the war has accelerated demand for defense products, further solidifying the company's market position.
- Investment in Digital Defense: Leonardo is investing in defense electronics and interconnected platforms, such as the 'Michelangelo Dome,' aimed at enhancing its competitiveness in digital defense to address increasingly complex security threats.
- Analyst Rating Upgrade: Barclays analysts upgraded Leonardo's rating from Neutral to Overweight, believing that the U.S.-Iran conflict will drive short-term growth in the defense sector, while noting Leonardo's stronger earnings momentum compared to peers.
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Analyst Views on BA
Wall Street analysts forecast BA stock price to rise
16 Analyst Rating
14 Buy
1 Hold
1 Sell
Strong Buy
Current: 214.100
Low
150.00
Averages
269.14
High
298.00
Current: 214.100
Low
150.00
Averages
269.14
High
298.00
About BA
The Boeing Company is an aerospace company. Its segments include Commercial Airplanes (BCA), Defense, Space & Security (BDS), and Global Services (BGS). Its BCA segment develops, produces and markets commercial jet aircraft principally for the commercial airline industry worldwide. Its family of commercial jet aircraft in production includes the 737 narrow-body model and the 767, 777 and 787 wide-body models. Its BDS segment is engaged in the research, development, production and modification of manned and unmanned military aircraft and weapons systems for strike, surveillance and mobility. Its BGS segment provides services to its commercial and defense customers worldwide. It sustains aerospace platforms and systems with a range of products and services, including supply chain and logistics management, engineering, maintenance and modifications, upgrades and conversions, spare parts, pilot and maintenance training systems and services, technical and maintenance documents, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Rheinmetall Projects 45% Sales Growth in 2023 Amid Defense Spending Surge
- Sales Growth Outlook: Rheinmetall anticipates a sales increase of 40% to 45% in 2023, reaching between €14 billion and €14.5 billion, reflecting a surge in global demand for military equipment, particularly in the context of the Ukraine war, showcasing the company's strong position in the defense market.
- Record Order Backlog: The company's order backlog has reached a record high of €63.8 billion, a 36% increase year-over-year, indicating that Rheinmetall will have ample production capacity to meet the rising defense demands in the coming years, further solidifying its market leadership.
- Profitability Improvement: The operating margin is expected to rise to around 19% in 2026 from 18.5% in 2025, which not only reflects the company's success in cost control and efficiency improvements but also enhances shareholder return expectations, boosting market confidence.
- Positive Market Reaction: Despite 2025 sales of €9.94 billion falling short of expectations, Rheinmetall's stock has surged approximately 540% over the past three years, demonstrating investor confidence in its long-term growth potential, especially against the backdrop of increased European defense spending.
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- Production Continues: Despite the defect, production of the 737 Max continues at the current pace, with affected aircraft undergoing rework expected to take only a few days, thereby minimizing the impact on delivery schedules.
- Orders and Deliveries: Boeing delivered 51 commercial aircraft in February, marking its strongest monthly result since 2017, and secured 21 gross aircraft orders, although six were cancellations, resulting in six net orders, indicating resilience in market demand.
- Potential Major Sale: Boeing is nearing a significant potential sale of about 500 737 Max jets, which could be announced during Donald Trump's planned visit to Beijing, although the agreement has not yet been finalized, potentially providing crucial support for the company's financial recovery.
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- Impact of Trading Restrictions: Due to trading restrictions, we are unable to trade any stocks mentioned by Jim Cramer on Thursday; despite the oversold market, we must carefully select stocks and recommend gradual purchases to maintain flexibility.
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Leonardo Aims to Double Profits by 2030 Amid Defense Sector Growth
- Strong Growth Outlook: Leonardo stated on Thursday that it aims to double profits by 2030, driven by surging defense demand from the Ukraine war and the Iran conflict, highlighting its robust growth potential in the defense sector.
- Record Order Backlogs: Both Leonardo and German peer Rheinmetall reported record-high order backlogs, with Leonardo's CEO noting that the war has accelerated demand for defense products, further solidifying the company's market position.
- Investment in Digital Defense: Leonardo is investing in defense electronics and interconnected platforms, such as the 'Michelangelo Dome,' aimed at enhancing its competitiveness in digital defense to address increasingly complex security threats.
- Analyst Rating Upgrade: Barclays analysts upgraded Leonardo's rating from Neutral to Overweight, believing that the U.S.-Iran conflict will drive short-term growth in the defense sector, while noting Leonardo's stronger earnings momentum compared to peers.
See More
Boeing Warns of 737 MAX Delivery Delays Due to Wiring Flaws
- Delivery Delay Risk: Boeing has warned that some 737 MAX aircraft may face delivery delays due to wiring flaws caused by machining errors, which could impact first-quarter delivery schedules and create investor anxiety.
- Stable Production: Despite the delivery delays, Boeing continues to produce new 737 MAX jets at a rate of 42 per month and plans to increase production to 47 jets per month later this year, demonstrating resilience in its production capabilities.
- Safety Assurance: Boeing stated that all in-service 737 MAX aircraft can continue to operate safely and does not expect the issue to affect its goal of delivering approximately 500 737 jets this year, aiming to maintain customer confidence.
- Historical Delivery Data: In February, Boeing delivered 51 aircraft, the highest monthly total since 2018, including 43 737 MAX jets, reflecting a positive performance amid recovering market demand.
See More
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- Flight Adjustment Risks: Air New Zealand stated it would suspend its financial outlook and make initial fare adjustments if fuel markets and operating conditions remain unstable, highlighting the vulnerability of airlines in a high fuel price environment, potentially affecting profitability.
- Demand and Pricing Power: Despite rising fuel prices, United Airlines CEO Scott Kirby noted that travel demand remains strong, and if this trend continues, airlines may gain more pricing power; however, this will depend on the duration of the conflict.
- Delayed Market Response: Analysts expect airlines to face the most acute financial impact in the next 30-90 days, as they booked yields for flights assuming lower fuel prices, making it difficult to adjust fares quickly, which could lead to earnings hits in the first quarter.
See More
Rheinmetall Projects 45% Sales Growth in 2023 Amid Defense Spending Surge
- Sales Growth Outlook: Rheinmetall anticipates a sales increase of 40% to 45% in 2023, reaching between €14 billion and €14.5 billion, reflecting a surge in global demand for military equipment, particularly in the context of the Ukraine war, showcasing the company's strong position in the defense market.
- Record Order Backlog: The company's order backlog has reached a record high of €63.8 billion, a 36% increase year-over-year, indicating that Rheinmetall will have ample production capacity to meet the rising defense demands in the coming years, further solidifying its market leadership.
- Profitability Improvement: The operating margin is expected to rise to around 19% in 2026 from 18.5% in 2025, which not only reflects the company's success in cost control and efficiency improvements but also enhances shareholder return expectations, boosting market confidence.
- Positive Market Reaction: Despite 2025 sales of €9.94 billion falling short of expectations, Rheinmetall's stock has surged approximately 540% over the past three years, demonstrating investor confidence in its long-term growth potential, especially against the backdrop of increased European defense spending.
See More
Boeing 737 Max Deliveries Delayed Due to Wiring Defect
- Delivery Delays: Boeing (BA) announced that a wiring defect on some 737 Max aircraft will delay a portion of deliveries, although the company expects to meet its full-year delivery goal, with the issue stemming from minor scratches caused by a machining error affecting quality standards.
- Production Continues: Despite the defect, production of the 737 Max continues at the current pace, with affected aircraft undergoing rework expected to take only a few days, thereby minimizing the impact on delivery schedules.
- Orders and Deliveries: Boeing delivered 51 commercial aircraft in February, marking its strongest monthly result since 2017, and secured 21 gross aircraft orders, although six were cancellations, resulting in six net orders, indicating resilience in market demand.
- Potential Major Sale: Boeing is nearing a significant potential sale of about 500 737 Max jets, which could be announced during Donald Trump's planned visit to Beijing, although the agreement has not yet been finalized, potentially providing crucial support for the company's financial recovery.
See More
Market Oversold, Investment Opportunities Arise
- Oversold Market Signal: The market selloff accelerated as U.S. crude prices surged approximately 8%, pushing the S&P Short Range Oscillator down to -5.48%, significantly below the -4% oversold threshold, indicating a potential rebound opportunity in the near term.
- Impact of Trading Restrictions: Due to trading restrictions, we are unable to trade any stocks mentioned by Jim Cramer on Thursday; despite the oversold market, we must carefully select stocks and recommend gradual purchases to maintain flexibility.
- Potential Buy Stocks: The five stocks we are interested in include Boeing, Alphabet, Goldman Sachs, Nike, and Cardinal Health; while Boeing faces challenges from rising fuel prices, its new jets' fuel efficiency remains attractive over time.
- Market Volatility and Strategy: Given the current market environment, if oil prices continue to rise, it could lead to further market declines, hence we advise keeping some cash on hand to seize future buying opportunities.
See More
Leonardo Aims to Double Profits by 2030 Amid Defense Sector Growth
- Strong Growth Outlook: Leonardo stated on Thursday that it aims to double profits by 2030, driven by surging defense demand from the Ukraine war and the Iran conflict, highlighting its robust growth potential in the defense sector.
- Record Order Backlogs: Both Leonardo and German peer Rheinmetall reported record-high order backlogs, with Leonardo's CEO noting that the war has accelerated demand for defense products, further solidifying the company's market position.
- Investment in Digital Defense: Leonardo is investing in defense electronics and interconnected platforms, such as the 'Michelangelo Dome,' aimed at enhancing its competitiveness in digital defense to address increasingly complex security threats.
- Analyst Rating Upgrade: Barclays analysts upgraded Leonardo's rating from Neutral to Overweight, believing that the U.S.-Iran conflict will drive short-term growth in the defense sector, while noting Leonardo's stronger earnings momentum compared to peers.
See More
Boeing Warns of 737 MAX Delivery Delays Due to Wiring Flaws
- Delivery Delay Risk: Boeing has warned that some 737 MAX aircraft may face delivery delays due to wiring flaws caused by machining errors, which could impact first-quarter delivery schedules and create investor anxiety.
- Stable Production: Despite the delivery delays, Boeing continues to produce new 737 MAX jets at a rate of 42 per month and plans to increase production to 47 jets per month later this year, demonstrating resilience in its production capabilities.
- Safety Assurance: Boeing stated that all in-service 737 MAX aircraft can continue to operate safely and does not expect the issue to affect its goal of delivering approximately 500 737 jets this year, aiming to maintain customer confidence.
- Historical Delivery Data: In February, Boeing delivered 51 aircraft, the highest monthly total since 2018, including 43 737 MAX jets, reflecting a positive performance amid recovering market demand.
See More
Airlines Adjust Fares Amid Soaring Fuel Prices
- Fuel Surcharge Increase: Cathay Pacific announced it would nearly double fuel surcharges starting March 18, reflecting the pressure on airlines from soaring fuel prices due to the U.S. and Israel's attacks on Iran, which may impact consumer travel choices.
- Flight Adjustment Risks: Air New Zealand stated it would suspend its financial outlook and make initial fare adjustments if fuel markets and operating conditions remain unstable, highlighting the vulnerability of airlines in a high fuel price environment, potentially affecting profitability.
- Demand and Pricing Power: Despite rising fuel prices, United Airlines CEO Scott Kirby noted that travel demand remains strong, and if this trend continues, airlines may gain more pricing power; however, this will depend on the duration of the conflict.
- Delayed Market Response: Analysts expect airlines to face the most acute financial impact in the next 30-90 days, as they booked yields for flights assuming lower fuel prices, making it difficult to adjust fares quickly, which could lead to earnings hits in the first quarter.
See More
