Is Leonardo (BIT:LDO) Undervalued As Q2 Sales And Net Income Improved?

Leonardo (BIT:LDO) is back in focus after its latest earnings report on 30 July 2026. The company reported higher second quarter sales and net income, while six month net income moved in the opposite direction year over year.

See our latest analysis for Leonardo.

Leonardo's recent earnings update has coincided with short term share price momentum, with a 1 day share price return of 2.61% and a 30 day share price return of 13.04%. The 1 year total shareholder return of 21.09% and very large 5 year total shareholder return suggest the longer term story has been strong so far.

If you are looking for other defense and aerospace related ideas, it can be worth scanning companies exposed to similar spending trends through 35 power grid technology and infrastructure stocks

Bulls point to Leonardo's stronger recent returns and the latest quarterly lift in sales and earnings. Bears highlight weaker six month net income. The valuation section next weighs which side current pricing seems closer to.

Most Popular Narrative: 20% Undervalued

The most followed narrative currently places Leonardo's fair value at about €68.67, compared with the latest close of €55.12. In that framework, this implies meaningful upside.

Ongoing operational optimization, digitalization of manufacturing processes, and a company wide "capacity boost" program are yielding measurable gains in profitability and efficiency, evidenced by EBITA and free cash flow growing faster than revenues. This trajectory suggests improving net margins and cash conversion over the medium term.

Read the complete narrative. Read the complete narrative.

Want to see what sits behind that fair value for Leonardo? The narrative leans heavily on faster profit growth, rising margins, and a richer earnings multiple. The specific targets and timing might surprise you.

Result: Fair Value of €68.67 (UNDERVALUED)

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

However, the bullish Leonardo narrative could be challenged if Aerostructures keeps draining cash or if large integrations, such as Iveco Defence, underperform against expectations.

Find out about the key risks to this Leonardo narrative.

Next Steps

Feeling encouraged by the tone around Leonardo, or still on the fence about its outlook? Take a closer look at the factors investors like and review the 5 key rewards.

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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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