BofA Sees Q3 Upside for Leonardo SpA Amid Defense Electronics Momentum

07:33 AM EDT, 10/21/2026 (MT Newswires) -- BofA Global Research expects Leonardo SpA's (LDO.MI) third-quarter revenue to come in ahead of consensus when it releases its latest results on Nov. 4, bolstered by "strong" momentum in its defense electronics segment. "The key source of differentiation in our Q3 forecasts versus consensus is in Defence Electronics; we are 3%ahead of consensus on Q3 revenues, modelling 30% YoY growth in Q3. We assume an 18% segment contribution from the Iveco Defence Vehicles acquisition and 11.7% organic growth, a slight slowdown vs. Q2'26 given more challenging year-on-year comparatives," analysts said Tuesday. "We are 5% ahead of consensus on segment EBITA. We model 70bp segment margin expansion in Q3 (vs consensus +40bps) given the strong momentum demonstrated in H1'26 (+110bps) which was a key driver of management's upgrade to its FY26 margin target." The research firm forecasts a total revenue of 5.38 billion euros for the quarter, 2% higher than the Visible Alpha consensus. For 2026, the Italian aerospace and defense group is anticipated to reaffirm its full-year guidance after raising its outlook in the first half. BofA also noted the possibility of a medium-term valuation re-rating, with the company potentially upgrading its targets when it presents its industrial plan update in March 2027. Against this backdrop, the stock's buy rating and price objective of 71 euros were maintained. The EPS estimate for 2026 was bumped up, while those for 2027 and 2028 were trimmed.