Long Trade Idea
Enter your long position between €57.74 (yesterday’s intra-day low) and €60.48 (yesterday’s intra-day high).
Market Index Analysis
Leonardo (BIT:LDO) is a member of the FTSE MIB Index.
This index bounced higher off support, confirmed by surging bullish trading volumes.
The Bull Bear Power Indicator for the FTSE MIB Index remains bearish with a descending trendline.
Market Sentiment Analysis
Equity futures are lower this morning following yesterday’s rally, sparked by comments from US President Trump that the US and Iran engaged in productive talks over the weekend. He announced a five-day halt on attacks on Iranian oil and energy infrastructure, but Iran has formally denied any negotiations are taking place. Oil prices later resumed their advance, and uncertainty remains, with volatility expected to remain elevated this week. Today’s PMI data and GameStop earnings are also expected today.
Leonardo Fundamental Analysis
Leonardo is an aerospace, defense, and security conglomerate with 180+ global sites. It ranks among the 12 biggest defense contractors, employs over 60,000, and operates from five divisions: Helicopters, Aircraft, Aerostructures, Electronics, and Cybersecurity.
So, why am I bullish on LDO.MI despite its nearly 50% rally?
I remain bullish on Leonardo amid strategic investments, the reduction in net debt to €1 billion, and its digital defense strategy, which includes investments in AI, cybersecurity, and computing to double core profits by 2030. I am equally bullish on its next-gen air defense system, the Michelangelo Dome, which could generate €6 billion in revenue by 2030. Its US subsidiary, Leonardo DRS (NASDAQ:DRS), is a significant revenue contributor and LDO benefits from favorable geopolitical issues and NATO spending pledges.
Metric | Value | Verdict |
P/E Ratio | 27.92 | Bearish |
P/B Ratio | 3.66 | Bearish |
PEG Ratio | 1.53 | Bullish |
Current Ratio | 0.98 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
Leonardo Fundamental Analysis Snapshot
The price-to-earning (P/E) ratio of 27.92 makes LDO an expensive stock. By comparison, the P/E ratio for the FTSE MIB Index is 13.13.
The average analyst price target for LDO is €67.42. This suggests moderate potential with acceptable downside risks.
Leonardo Technical Analysis
Today’s LDO Signal
Leonardo Price Chart
The LDO D1 chart shows price action inside a bullish price channel.
It also shows price action between its ascending 38.2% and 50.0% Fibonacci Retracement Fan levels.
The Bull Bear Power Indicator turned bearish, but remains above its ascending trendline, and has remained in bullish territory since mid-February.
The average bullish trading volumes are higher than the average bearish trading volumes.
LDO advanced as the FTSE MIB Index corrected, signaling a significant bullish trade.
My LDO Long Stock Trade
LDO Entry Level: Between €57.74 and €60.48
LDO Take Profit: Between €79.79 and €82.18
LDO Stop Loss: Between €47.11 and €50.12
Risk/Reward Ratio: 2.07
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