Leonardo Shares: Forecasts on the Stock’s Trend in the Medium and Long Term

Stock's Trend

How much are Leonardo shares listed at? What was the evolution of the stock on the stock market during the year and what performance should we expect in 2021? Is it worth investing in this company? or is it better to prefer other stocks?

In this brief study, I try to clarify whether an equity investment in the company is currently advantageous or inadvisable. If you want to know more, keep reading.

Stock performance and forecasts

Before talking about shares, I make a small introduction about the company. Leonardo Spa – known as Finmeccanica before 2016 – is a leading Italian company in the defense, aerospace and security sectors.

The company is structured in 5 operational divisions: helicopters, aircraft, aerostructures, electronics, and systems for safety and information.

Specifically, it is the 13th largest defense firm in the world and the third-largest in Europe with industry revenues accounting for 68% of turnover.

It is present in about 40 countries, mainly in Italy, the United Kingdom, the United States, Poland, France and Germany.

The company is listed on the FTSE MIB index of the Italian stock exchange. The largest shareholder is the Italian Ministry of Economy and Finance, which owns a 30% stake.

Let’s see how the stock is doing on the stock market from the chart below

2020 was a disastrous year for Leonardo shares – they are among those with the worst performances in Italy… 2021 does not open better.

Furthermore, prices have returned to the minimum levels recorded during the first lockdown in March. The worst session was on March 23, when the share price dropped to € 4.59, but then there was another crash at the end of October that made it even worse: € 4.09. In November there was a recovery of the stock which returned above 5 euros.

However, analyzing the situation of the company, whose balance sheets are not brilliant but not worse than many other companies in times of crisis, it is clear that the stock is definitely undervalued.

Is it worth buying Leonardo shares?

Since the beginning of 2020, Leonardo shares have lost approximately 52% of their value and are still not achieving great performances. This situation can be exploited for purchase at low prices, betting on the future rise of the stock that could even triple its value.

Personally, I am not interested in investing without guarantees and I am not interested in speculating on the rise or fall of a stock. I don’t go into this type of strategy that doesn’t have much use for me.

My investment philosophy is well known and does not have much room for investments that are too risky or too short. I never bet on single companies in business that could also go into distress. I prefer to diversify my portfolio to guarantee better investment stability even in times of crisis.

Where to buy Leonardo shares?

If you’ve never bought stock and want to do so now for the first time, there are essentially two options to choose from:

  • Traditional bank: in my experience, if you want to invest more than 3-4 thousand euros, your current account should be fine. On average, the most important Italian banks allow you to have a securities deposit, the problem is that often the operations have a high online cost and you have to evaluate case by case if it suits you;
  • Online platform: there are many platforms specialized in the purchase of shares and other financial instruments that are digitally native and allow you to access the markets in a more intuitive and often cheaper way. For small investments, they are often preferred.

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