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    Assessing Leonardo DRS (DRS) Valuation After ATSP5 Contract Win And THOR System Launch

    Simply Wall St·03/30/2026 04:18:27
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    Leonardo DRS (DRS) has drawn fresh attention after securing a role on the U.S. military’s ATSP5 contract, which has potential awards above US$25b over ten years, and unveiling its THOR embedded computing system.

    See our latest analysis for Leonardo DRS.

    Those contract wins and new product launches come as the stock trades at US$44.84, with a 90-day share price return of 31.38% and a three-year total shareholder return of 249.83%, which points to strong and sustained momentum.

    If defense tech growth stories like Leonardo DRS interest you, it is worth scanning the wider sector using our screener of 35 AI infrastructure stocks

    With the shares up 31.38% over 90 days and trading at US$44.84, yet still sitting around a 15% discount to the US$51.40 analyst price target, is there still a buying opportunity here, or is future growth already priced in?

    Most Popular Narrative: 12% Undervalued

    At $44.84, the most widely followed narrative sees Leonardo DRS trading below an estimated fair value of $50.90, with that view built on higher modeled growth and margins.

    Recent research points to a cluster of higher price targets for Leonardo DRS, with most analysts highlighting contract activity, backlog visibility, and future program opportunities as key inputs to their valuation work. At the same time, there are some caution flags around sector positioning, stock selection, and the quality of future growth.

    Read the complete narrative.

    Want to see what justifies paying up for defense earnings like this? The narrative leans on sturdier revenue expectations, a richer profit profile, and a reset future earnings multiple that still supports a higher fair value.

    Result: Fair Value of $50.90 (UNDERVALUED)

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

    However, this hinges on germanium supply and raw material costs staying manageable, as well as on key U.S. government programs progressing without major budget or timing shocks.

    Find out about the key risks to this Leonardo DRS narrative.

    Another View: Rich Multiples Raise the Bar

    The fair value narrative suggests Leonardo DRS is 12% undervalued at $44.84, yet the current P/E of 42.9x is higher than both the US Aerospace & Defense average of 35.7x and an estimated fair ratio of 31.8x. That richer pricing leaves less room for error, so which signal would you trust?

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

    NasdaqGS:DRS P/E Ratio as at Mar 2026
    NasdaqGS:DRS P/E Ratio as at Mar 2026

    Next Steps

    With mixed signals on value and growth so front and center, it helps to move fast and weigh the full picture for yourself using our breakdown of 2 key rewards and 1 important warning sign

    Looking for more investment ideas?

    If you are serious about building a stronger portfolio, do not stop at one defense name. Use the Simply Wall Street Screener to surface focused stock ideas.

    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.